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Mahesh

29/01/24 10:26 AM IST

China’s ties with Africa

In News
  • Recently, Chinese Minister of Foreign Affairs, Wang Yi, visited four African countries, Egypt, Tunisia, Togo and the Ivory Coast.
  • This was Wang Yi’s 11th annual trip to Africa to enhance economic and security cooperation with the continent.
Objectives of the visit
  • The major agenda was to implement the outcomes of the China-Africa Leaders Dialogue held in August 2023 in Johannesburg, South Africa.
  • It included the execution of three initiatives, including support for Africa’s industrialisation, agricultural modernisation, and cooperation on talent development.
  • The visit sets a precedent for the ninth Forum on China-Africa Cooperation 2024 (FOCAC).
Forum on China-Africa Cooperation
  • In 2000, the FOCAC held its first dialogue, aiming to consolidate China-Africa cooperation under diplomacy, investment and trade.
  • The dialogue aptly outlined the steady growth from trade, to aid, to “mutual security assistance,” under Xi Jinping. In 2013, the relationship amplified with China launching its Belt and Road Initiative (BRI), building inroads with 52 African countries as signatories.
  • Currently, China is Africa’s largest trading partner, with over one-fourth of its raw material exported to China.
  • The Chinese Loans to Africa database highlights that between 2000 and 2022, loans worth $170.08 billion were granted to 49 African countries.
  • The nature of Chinese presence in Africa has grown from being a mere investor to a strategic actor with the People’s Liberation Army Navy stationing its first international base in Djibouti.
China's objectives in Africa
  • First, access to key resources. Africa supplies 90% of the world’s cobalt and platinum, and 75% of coltan, essential for electronics.
  • China has the largest refineries in Africa for rare earths and minerals that are vital to its emerging tech industry. The dominance in the mining sector has made the U.S. dependable on China for key minerals from Africa.
  • Second, the African alliance and its geopolitical aspirations. In the UN General Assembly, Africa is the largest bloc and has the power to swing resolutions on contentious issues like the South China Sea.
  • Africa has been vocal in supporting China in the international arena including its “One China” policy for Taiwan and Hong Kong.
  • Third, strengthening the Yuan (RMB). China is encouraging Africa to trade in Chinese currency. The RMB offers cross-border yuan-based “panda bonds,” by which foreign governments can issue funds from China at lower interest rates.
  • Additionally, China’s debt restructuring of Zambia’s $4.1 billion loan has incentivised borrowers towards RMB. With lower Chinese interest rates and the depreciation of African local currency, the RMB stands as an alternative to the dollar.
  • Fourth, commercial opportunities. Africa imports largely from China for finished goods. The African markets for Chinese exports are beneficial for the Chinese economy. Africa’s young population and cheap labour force support Chinese exports globally and in Africa.
Source- The Hindu

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