Taku Fundira, tralac Researcher, discusses the Forum on China-Africa Co-operation (FOCAC) Summit

The establishment of the Forum on China-Africa Co-operation (FOCAC) Summit in 2000 marked a significant turning point in China-Africa relations. The convergence of over 40 African Heads of State and Government in Beijing, China for the 3rd Ministerial Conference in 2006 was suggested to be possibly the largest gathering ever of African leaders in Asia. From debt cancellations to preferential loans, China was making a statement on how serious it considers diplomatic relations with poor African countries as partners.

Exploitation or partnership?

The re-engagement of Africa is a strategic one that cannot be viewed as an accident or coincidental. Driven by its need to sustain its rapid growth as its economy booms, China requires adequate resources and Africa has resources and investment opportunities to offer. These include the relatively unexploited oil and gas reserves, metals and minerals, and might also include agricultural or fishery products, but the main focus is on energy, metals and minerals.

The economic and strategic consequences of China‘s increased focus on Africa have been the subject of much debate around the world. The resonating question has been, “How good is this for Africa?” Some commentators have suggested that China’s involvement will erode efforts to promote transparency and reduce corruption in Africa. China has also been viewed as having no interest in pressing African governments to respect human rights issues or be more democratic. However, others have suggested that by importing Africa’s raw commodities and more recently, African-manufactured value-added goods such as processed foods and household consumer goods, China has helped integrate the continent further into the global economy.

A closer look at China-Africa relations reveals that (Global Trade Atlas; Jun, 2012):

• Since 2006, China’s grant assistance, interest-free loans and preferential loans to Africa have increased steadily.

• It has trained more than 30,000 professionals in various sectors for Africa and offers 5,000-plus government scholarships annually.

• Since 2009, China has remained Africa’s largest trading partner. In 2011, trade between China and Africa reached US$ 146 billion, 14 times the 2000 level

• Tariff exemption and other measures adopted by China to boost African exports have begun to show effect with 49 African countries experiencing growth in their exports to China in 2010, while between 2000 and 2011; African exports to China have been growing rapidly, from US$ 4.8 billion to US$ 72 billion representing a compound annual growth of 24%.

• As of April 2012, China’s total direct investment in Africa reached US$15.3 billion, compared with less than US$500 million 10 years ago. More than 2,000 Chinese enterprises have invested or started businesses in 50 African countries.

• Despite the negative impact of the global financial crisis, China-Africa cooperation has shown robust growth, which has contributed to the recovery and development of not only the Chinese and African economies, but also the world economy as a whole.

Indeed, evidence suggests that both parties (China on one hand and Africa on the other) have benefited from their political and economic cooperation, despite the imbalances that still prevail in terms of geographic distribution of trade and investment. However, Haroz (2011) notes that the partnership also carries significant risks, especially for Africa, as “unless Africa carefully manages this relationship, it risks becoming the victim of Chinese exploitation.”

Opportunity for a win-win strategic partnership

The Fifth Ministerial Conference of the FOCAC to be held on July 19, 2012 in Beijing, under the theme of “Building on past achievements and opening up new prospects for the new type of China-Africa strategic partnership,” provides an opportunity for both parties to review their engagement and devise strategies that are mutually beneficial. During the summit, the two sides aim to achieve the following objectives at the:

1. To take stock of the implementation of the follow-up actions of the Fourth Ministerial Conference;

2. To explore ways and means to deepen the new type of strategic partnership and further develop FOCAC;

3. To identify the priority areas of and main measures for China-Africa cooperation in the next three years and formulate an action plan accordingly; and

4. To exchange views on major regional and international issues to better safeguard and expand common interests.

What can Africa push for?

The China-Africa relationship has evolved over the years, and it is time for African countries to gain greater leverage to ensure that they benefit from it as much as China does. For instance, the benefits from China such as Chinese aid and investment, if managed effectively can complement the social sector focus of most Western aid by strengthening Africa’s inefficient infrastructural capacity and untapped private sector. Conversely, if managed poorly, Africa risks Chinese exploitation and missing a prime opportunity to advance its political, economic, and social development. Thus Africa must proactively monitor and review the relationship and ensure that its interests are safeguarded in order for this relationship to provide a win-win solution.

Tell us what you think.

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Sources:

Jun, Z. 2012. Broad Prospects for the New Type of China-Africa Strategic Partnership. The Seventh Lanting Forum. Beijing [online]. Available at: http://www.focac.org/eng/zxxx/t951074.htm

Horaz. D. 2011. China in Africa: Symbiosis or Exploitation? The Fletcher Forum of World Affairs, Volume 35:2 , Tufts University [online]. Available at: http://www.fletcherforum.org/2011/05/15/haroz/

Global Trade Atlas database