Chinese Financing Powering Africa

Major narrative over the first two decades of the 21st century has been the rise of China and its emergence as an influential actor in Africa. The relationship has been mutually beneficial – with Chinese financing powering Africa’s commodity exports, economic growth, infrastructure, and knowledge transfer, while African minerals contributed to China’s high growth and economic expansion. That relationship, and China’s activities elsewhere, have faced withering criticism and prompted Africa’s traditional partners, Europe and the US, to reassess their relationship with the continent. Covid-19 has altered that trajectory and global trends are converging now to ensure that the coming decade will see a consolidation of China’s position in Africa as the dominant external actor. The continent will experience its first recession in 25 years, triggered by the economic shock of the coronavirus pandemic. Four negative trends converge to create a perfect storm: a commodity price crash, massive outflow of capital from frontier markets and emerging markets, a remittances shortfall and the collapse of tourism.

China will increasingly turn to Africa as it faces hostility elsewhere. In Asia, China faces outright distrust from its neighbors or at best, ambivalence. Japan has increased its defense spending to a record high – fraying ties with China are a driver. Relations with India became violent for the first time in decades earlier this year and Indonesia, Singapore, South Korea, the Philippines and Vietnam all mistrust Beijing. In a poll conducted in 14 advanced economies and published at the beginning of October, researchers at the Pew Research Center found that unfavorable views of China had soared in the last year. In the Western hemisphere there are hard limits on how much more influence Beijing can exert in what has traditionally been America’s sphere of influence. A modicum of competent leadership in Washington would see Beijing face stiffening hostilities everywhere. As the world divides, Beijing will turn to the region in which its power and influence are growing and where it faces no peer competitor – Africa.

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