Growing China-Africa relations has rattled the US and other top economies
With the fast growing Sino-Africa relations, China is not ready to let go its grasp on the continent where it has continued to strengthen political, economic, military, social and cultural connections with African nations.
The East Asian nation which has in recent times been on a trade war with the US is now eyeing to even capture more of the African market, counting on the upcoming Belt and Road Forum for International Cooperation(BRF) set for Beijing later in April.
The forum will be the most important diplomatic event China will host this year and an international gathering that will capture the world’s attention, as China seeks to deepen corporations under the Belt and Road Initiative (BRI).
The growing China-Africa relations has rattled a number of European states, the US and even fellow Asians such as Japan who have historically maintained close ties and development relations with the continent.
These countries are equally scrambling for a pie of the mineral-rich continent, which also provides a huge market for their exports.
Africa has been described by pundits as the next frontier, with major cities attracting multinational companies who are strategically positioning themselves to capture the different regional markets.
China has strategically positioned itself as a financier and developer at the same time, a strategy it uses to win government contracts and secure Public-Private-Partnerships (PPPs).
Beijing has been accused of setting a “debt trap” for African countries, among them East Africa’s leading economy-Kenya which has borrowed heavily to invest in its infrastructure development mainly the Standard Gauge Railway (SGR).
The region’s economies (East Africa) are reported to have borrowed over US$29.42 billion from Beijing in the past 10 years to grow their transport, energy, manufacturing and communication sectors.
The Chinese Embassy in Nairobi has however refuted the claims insisting the China-Africa relations are based on mutual trust.
“China-Africa relations’ fast growth has attracted a lot of attention which is bringing up the debt trap issue. I would however describe the corporation as a pie where everyone is getting something. The corporation is for economic growth,” China’s Charge’ D’affaires (Kenya)LI Xuhang said at a briefing in Nairobi on March 19.
Six years since it was proposed, the BRI has become China’s largest platform for international cooperation. To date, 123 countries and 29 international organizations have signed BRI agreements with China.
“From the start, the BRI follows the sound principle of consultation and cooperation for shared benefits. It has created enormous opportunities for all participants,” China notes in a statement ahead of the Beijing meet.
The BRI has seen East Africa benefit on road, rail and energy projects among others.
“Signing up for the BRI has enabled countries to grow at a faster pace, improve their people’s lives and reap win-win outcomes,” China notes.
2019 forum and strategy
With the theme of “Belt and Road Cooperation:Shaping a Brighter Shared Future”, the second BRF aims to strengthen cooperation under the Belt and Road Initiative, as China moves to secure more deals in Africa.
According to the Chinese government, the country will build consensus with participating nations on high-quality development, follow the principle of consultation and cooperation for shared benefits, champion an open, transparent and inclusive approach to BRI cooperation, and strive for green and sustainable development.
China is keen to use the forum to identify key projects targeted by the different countries and offer a possible solution to their development.
“China and the participating countries will seek greater complimentarity between the BRI and their development strategies, agree on a line-up of key cooperation projects, promote the implementation of the UN 2030 Agenda for Sustainable Development and pay more attention to improving the lives of the ordinary people as we deepen our corporation,” the Chinese Embassy in Nairobi said in a communiqué.
“China will champion open and inclusive cooperation, support economic globalization, uphold multilateralism and work with all to make the world economy an open one,” the Embassy noted.
During the 6th Forum on China-Africa Cooperation held in Beijing in September last year, President Xi Jinping pledged US$60 billion in new development financing to African countries.
Jinping who addressed African leaders at the forum which focused on the “Belt and Road” initiative, insisted that China’s investments on the continent have no political strings attached.
President Xi is expected to give a keynote address at the opening ceremony of the second BRF in April where he will also chair a leaders’ roundtable.
There will also be a high-level meeting, thematic forums and a CEO conference.
This years’ BRF has three things to look out for. First, the number of foreign heads of state and government officials in attendance (expected to be high) as they seek partnerships.
Secondly, the number of countries participating with thousand of delegates expected from over 100 countries, and third, there will be numerous side events including 12 thematic forums focusing on practical cooperation, and for the first time, a conference organized specifically for the business community.
A huge number of African leaders are expected to attend the forum where they will be keen to present interests of their respective countries especially on development.
Business communities from Africa are also expected to sign numerous MoUs for closer trade ties, a move that will tighten China’s grip on Africa.
US counter strategy
The US has on several occasions shown to be uncomfortable with the growing Sino-Africa relations, with the ongoing trade wars which include the ban on the use of Huawei products by government entities being evident.
In what is seen as a move to counter the Chinese and secure a market for itself, President Trump signed into law the Better Utilization of Investments Leading to Development (BUILD) Act of 2018, On October 5, last year which creates an International Development Finance Corporation (IDFC) and establishes a powerful tool for U.S assistance and foreign policy.
IDFC targets foreign countries including the East African nations which are expected to be among the biggest beneficiaries of funding from the US government, as President Donald Trump’s administration remains keen to command its influence on Africa.
The IDFC is coiled towards supporting private investment and development projects in emerging countries, including backing private investment; a move that gives or rather empowers private entities which have previously struggled with funding.
It will support investments by American companies which have struggled to invest in the region and the continent at large where they have cited the challenge of securing financing and mitigating risk as impediment, which has blocked them from competing with the deep-pocketed Chinese for major projects.
It is expected to further compliment the U.S. Agency for International Development (USAID), an independent agency of the US federal government that is primarily responsible for administering civilian foreign aid and development assistance.
With a budget of over US$27 billion, USAID is one of the largest official aid agencies in the world, and accounts for more than half of all U.S. foreign assistance-the highest in the world in absolute dollar terms.