CHINA AFRICA : A new beneficial alliance

CHINA – AFRICA : A new beneficial alliance


CHINA-AFRICA: A new beneficial alliance

Author: Elisa Mariani
Translated by Martina Paoli
October 2016

After the summit between China and Africa held on November 2006 in Beijing, attended by the African highest authorities, which was the beginning of a solid cooperation, these two countries have come a long way together. In 2014, the parties carried out over $200 billion commercial deals, while, recently, they have made possible an infrastructural development in Africa.

This partnership derives from the China’s interest in African natural resources, especially energy resources. In fact, Chinese imports from Africa consist largely of wood, diamonds, gold, cobalt, platinum, uranium and petroleum. Africa, on the other hand, receives a significant economic, political support from China, one of the most powerful countries in the world, which is investing in the construction of hydroelectric plants, dikes, railways, public buildings, streets and telecommunication networks in the African continent.

For example, China has signed an agreement in order to be able to use Algeria’s oil, in exchange for the construction of different types of buildings, including schools and institutional buildings; while $9 billion have been allocated for the creation of dykes and railways in the Democratic Republic of the Congo, in exchange for the exploitation of the copper and cobalt mines.

During an interview at the Global African Investment Summit, Sindiso Ngwenya, the Secretary- General for the Common Market for Eastern and Southern Africa, reminded the importance of the Chinese support for the infrastructural development in the tripartite free trade area (TFTA), which involves 26 African countries with the aim of creating a unified market based on the industrial, infrastructural growth and the elimination of custom duties and other restrictions to the free movement of goods.

Moreover, according to Ngwenya, the Chinese aid has been important for the integration and trade between African regions, and the improvements in the sectors of energy, agriculture and human resources, which represent only some of the main factors for the achievement of the purposes of Agenda 2063, the plan for the development and the socio-economic transformation of the African continent over the next 50 years.

The China-Africa Summit of 2006 has marked an important turning point for the partnership between these two developing countries.

Taking advantage of the cold relations between Europe and Africa, the President Hu Jintao announced a number of measures to be implemented by 2009, for the prosperity and the well-being of the African countries, including the allocation of $5 billion divided into loans, export credits, and financial subsidies for the creation of a China-Africa Development Fund, in order to increase Chinese investments in the African continent.

China has also declared to be ready to eliminate the debts of the poorest countries, expand the imports of goods from Africa, removing customs barriers, and train 15,000 qualified people in the sectors of agriculture, education, and medicine.

Chinese interest in training qualified personnel and investing in Africa’s agriculture are high due to the need to import from the African continent raw materials such as tobacco and cotton.
In fact, thanks to China, 48 states of the art establishments for agricultural production have been built up in Africa to support local farmers.

Currently, this historic alliance still achieves mutually beneficial results and continues to represent a valid example for other economies, although strongly criticized and feared by USA and EU, which are both potential partners of Africa, but not as competitive and concrete as China. The allocation of $ 60 billion to promote Chinese investments in Africa, announced by the leader Xi Jinping, confirms the success of this partnership.

In fact, in December 2015, at the Summit of the Forum on China-Africa Cooperation (FOCAC), held in Johannesburg, the President declared those funds will be used for the collaboration between the two parties, with the aim of increasing the welfare of the African continent. The financial support includes $40 billion for concessional loans and zero-interest loans, and $150 million to provide food assistance to people affected by El Niño, an extreme climate phenomenon, which devastated the harvest in those areas of Africa.

According to Jacob Zuma, the President of South Africa, thanks to Chinese aid, the country intends to restore the mining industry, which has recently felt the effects of a slowing demand for raw materials and a decrease in products prices.

Furthermore, Huawei, the Chinese multinational company which provides networking products and telecommunication solutions, is significantly expanding its business, managing a turnover of more than $3 billion in Africa, thanks to the creation of a national phone network and other internet networks in Zambia and Nigeria.