China-Africa Economic & Trade Relations

China-Africa Economic & Trade Relations


Following the December 2015 Johannesburg conference on China-Africa Co-operation, there can be no more denying the fact that China has become big in Africa and massively involved in several developmental strides and projects many countries across the continent are making and undertaking. Just like the rest of the world, Africa can no longer ignore China. It has become, by far, Africa’s biggest trading partner, exchanging about $160 billion worth of goods yearly. There are many Chinese companies operating and working on several projects on the continent, especially in the areas of construction, infrastructural development, telecommunications, transport, agriculture, petrochemicals including mining. Reports say over one million Chinese, mostly labourers and traders, have made Africa their home within the past decade. However, despite the obvious economic gains for Africa, a lot of criticism trails China-Africa Co-operation, with imperialism the major claim. A former Governor of the Central Bank of Nigeria, Lamido Sanusi, puts it this way: Africa is opening itself up to a “new form of imperialism”.

Reason for the conference
China's second largest source of crude imports is Africa. Its largest African suppliers are Angola, Equatorial Guinea, Nigeria, the Republic of Congo, and Sudan. Smaller exporters include Algeria, Chad, Gabon, Kenya, Liberia, and Libya. China's top five African trading partners are Angola, South Africa, Sudan, Nigeria, and Egypt. While the majority of Africa's exports to China are in oil, it also exports iron ore, metals, and other commodities, as well as a small amount of food and agricultural products. At the same time, China exports a range of machinery including transportation and communications equipment, and electronics to Africa.

In its quest to secure an economic foothold in Africa, China engages in a form of commercial diplomacy that most other countries can't match. It pitches vast trade, aid, and investment deals on frequent trips to resource-rich countries, and retains an almost unparalleled ability to provide low-cost financing and cheap labour for infrastructure projects. It provides low-interest loans to countries with low credit ratings, and in turn receives favourable rights to develop oil and mining projects. In addition, gets major deals in construction and infrastructure development. China, including its stateowned banks, say it will provide $1 trillion in financing to Africa by 2025, much of which will go toward infrastructure, including transnational highways, railways, and airports.

China has a two-pronged approach to its economic relations to Africa: offering resource-backed development loans to oil and mineral-rich nations like Angola, and developing special trade and economic cooperation zones in several states, including Nigeria, Ethiopia, and Zambia.

Contentious issues in the Co-operation


Local workers fault Chinese companies for maintaining unfair labour practices thus debunking China’s official stance that says Chinese investments in Africa is a “win-win” situation for both sides. In Nigeria and Zambia, local workers have protested against Chinese companies over poor wages and labour practices. Some other countries have also voiced concern over China's continued use of Chinese labour on its projects (more than one million Chinese citizens now reside in Africa) as against local workforce.

China exploits African resources without building up local African economies and developing skills. It does this by exporting Africa’s primary goods and importing manufactured ones without transferring skills. In 2011, late President of Zambia Michael Sata won the presidency largely by tapping into anti-Chinese resentments.

Safety and environmental issues
China is known not to be safety and environment conscious especially in the areas of mining and petrochemicals. Grievances range from poor compliance with safety and environmental standards to unfair business practices and flouting of local laws.

Chinese companies underbid local firms and influence tenders board decisions in various African countries. International observers say China's willingness to pay bribes - as documented by Transparency International’s 2010 Bride Payers Index report - and to attach few prerequisites for aid undermines both local and international efforts to implement good governance and macroeconomic reforms on the continent.

China spies on its friends especially through cyber-sphere. Almost all telecommunication contracts on the continent are handled by Chinese firms like ZTE and Huawei, both supported by Chinese banks, which are known to be fronts for the Chinese government.

Fake products
Despite China having the free run of most African countries, it is continually fingered as the major culprit in importing fake and substandard products into the continent. Its importation of fake, substandard and cheap textile products killed the Nigerian textile industry. Chinese citizens have been arrested in various African countries including Ghana and Nigeria as being the brains behind massive production of counterfeit audio and video DVDs. Substandard mobile phones produced in China are also prevalent in Africa.

Indifference to local populace/issues
China’s foreign policy is based on state-to-state relations, practicing noninterference in local issues and politics. It closes its eyes on the gulf between African rulers and their people and human rights violations in many African countries where it has secure lucrative deals. It has few political ambitions, cooperating with democracies as well as authoritarian governments.

No doubt, Chinese investment and economic presence has helped spur high economic growth on the continent. But in view of these above-mentioned contentious issues, is it not about time for Africa to re-access and take a critical look at China’s role in Africa? The Summit will therefore try to:
  • Assess the benefits or otherwise of Sino-Africa ties over the years
  • Query if it makes good economic sense to allow China easy access of Africa’s resources?
  • Compare Africa doing business with the West and China
  • Enlighten ordinary citizens and business people about China and its African economic policies


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Speaking opportunities*
Kayode Soyinka

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