Africa needs to take ownership of its relationship with China

Amid its declining popularity in the developed world, China’s strategic interests in Africa have become elevated. The Asian powerhouse defends aspects of the liberal order that benefit its economy and explicitly calls for a “new type of international relations”. China’s foreign policy aims to align its global influence with its economic power. By supporting African countries economically and financially, Asia’s largest economy is building a client base that will enable it to reshape the global order to better accommodate and promote its interests.

African policymakers must remain aware that trade and investment are tied to China’s own circumstances. Lazy ideas that China-Africa trade, investment and/or loans are somehow ring-fenced from fluctuations in China‘s own circumstances are imprudent. Policymakers and businesses should anchor their expectations for China-Africa relations to the country’s domestic and international interests.

Recently, Beijing hosted the ninth ministerial conference of the Forum on China-Africa Co-operation (Focac). The summit‘s theme, Joining Hands to Advance Modernisation and Build a High Level China—Africa Community with a Shared Future, emphasises mutual respect and equality. With more than 40 presidents and 80 ministers from China and Africa attending, the focus was not just on style, but also on substance, driven by about 1,000 business leaders engaging in parallel sessions aimed at boosting collaborative opportunities.

This gathering mirrors a pivotal moment in 2005, when leaders of Standard Bank and the Industrial and Commercial Bank of China (lCBC) first met. This encounter eventually led to ICBC purchasing a 20% stake in Standard Bank Group for $5.46bn (about R96bn) in 2007, marking the largest Chinese outbound investment at that time. Today, China is Africa’s most important commercial partner. The partnership, shaped by Focac, has spurred remarkable growth in bilateral trade, investment and lending. It’s clear that China’s economic landscape is changing. The focus has shifted towards quality over quantity when it comes to development. In 2017, the government made it clear China had entered a “new era", and that the central concern of its domestic economic policy was now to address unbalanced and inadequate development across the country.

China’s nominal GDP growth has fallen to just 3.97% - a rate unheard of before the pandemic. Since 2021, annual investment in manufacturing has surged by ¥10 trillion (about R25-trillion), infrastructure investment has increased by a far more modest ¥3 trillion, and real estate investment has fallen by nearly ¥5 trillion. These developments change how China connects to the rest of the world. Think less oil and less iron ore. Thus, it’s no surprise that since Focac in Dakar in 2021, Chinese imports from Africa have hovered around $100bn, despite commitments to triple imports by 2024. Instead, African countries have seen reduced market importance. In fact, in 2023 China imported nearly as much from Vietnam as it did from Africa.

Conversely, Africa’s markets are becoming more vital for Chinese exporters.

Since the global financial crisis, China has targeted new export destinations. Lower costs, a weaker currency, and supply-side incentives have boosted export competitiveness. A notable 21 of China‘s 50 fastest-growing markets since the pandemic are in Africa. Today, one quarter of all the goods imported into Africa are from China. More than 40% of Angola, Ghana, Kenya and Tanzania’s imports originate from China.

Africa’s trade deficit with China reached $67bn in 2023, and only eight African countries have a trade surplus with China. China has put in place steps aimed at addressing this imbalance, focusing on credit lines, small and medium-sized enterprises and currency use to facilitate trade. However, Africa remains primarily a resource supplier and a consumer of Chinese goods.

What is worse, the Global South is pushing back against China, with countries such as Indonesia and South Africa imposing tariffs on Chinese imports. This state of affairs reinforces the notion that Africa must take ownership of the relationship, articulating its priorities, such as generating employment, increasing skills and tech transfers, and boosting intra-African trade,

African countries need to establish specific metrics that transcend rhetoric for measuring the execution of coherent objectives. They must fortify the benefits of co-operation achieved so far and move China-Africa relations into the “new era". Merely hoping for balanced trade relations and increased Chinese investment is useless.

To this end, African countries must create environments that attract private investment and foster regional connectivity to support sustainable development. And that is Africa‘s homework.