China is Africa’s largest trading partner for15 years and ties continue to strengthen

Published: June 11,2024

The Africa Day celebration in the month of May every year is a momentous occasion to reflect on the condition and needs of the continent

The African continent has made remarkable socio-economic and political progress since the end of colonial domination with the realisation of self-determination in South Africa in 1994

However, the continent, equally faces continuous challenges with historically disabling international system, and foreign relations which have constrained its progress. It is this in context that China has since 2000, leveraged on historical friendly political relations with the continent to create mutually beneficial win-win relations with profound impact on the continental infrastructure landscape, followed by ongoing diversification into other sectors.

China has been the number one trading partner with the continent for more than a decade. Sino-Africa relations under the Belt and Road Initiative (BRI) rapidly expanded since 2000, until they were slowed down due to the Covid-19 pandemic.

However, the end of the pandemic has witnessed reinvigorated investment in traditional sectors of partnerships such as infrastructure development, agriculture, manufacturing, mining, new ones focussing on new technologies and renewable energy centred on the green transition initiatives.

Crucially, China has also committed to promoting public-private partnerships (PPPs), as an additional investment vehicle in Africa. And globally, with the potential to unlock more sources of financing and co-operation.

Chinese investments in the African continent have sharply grown since the end of the Covid-19 pandemic, as Beijing continues to be involved in infrastructure development such as the building of ports, energy generation plants, hydropower plants, construction of railways and roads linking the continent, increasingly facilitating intra-continental and international movement of goods and services within and outside the continent.

Chinese operators involved in major BRI projects on the continent have embarked on a localisationstrategy based on transfer of infrastructure to the domestic and or local authorities, and the training of thousands of local workers, passing on skills and knowledge in the running and maintenance of the infrastructure. Such processes facilitate the transfer of knowledge and skills to ensure the sustainability of the projects, while promoting mutually beneficial development, demonstrating what friendly cooperation means for the continent.

This month, China handed over the control of two major BRI railway and road projects to the governments of Ethiopia, Djibouti, and Kenya. National entities in these countries, such as the Ethiopia-Djibouti Railway Share Company (EDR) assumed control of the 752km (467 mile) railway linking Ethiopia and Djibouti, while in Kenya, the China Road, and Bridge Corporation (CRBC) transferred more than 90% of the operations of the Mombasa-Nairobi Standard Gauge Railway to Kenya Railways Corporation, with expectations to complete the handover next year.

These initiatives have allowed the establishment of railway tracks, new locomotives, efficient movement of goods and services within the Horn of Africa, opening new markets and creating new jobs while attracting new investment in the region.

The Ethiopia-Djibouti Standard Gauge Railway, also known as the Addis Ababa-Djibouti Railway, was built by a joint consortium of China Railway Engineering Corporation (CREC) and China Civil Engineering and Construction Corporation (CCECC) at a cost of US$4.5 billion (R83bn). About US$2.5 billion (R46.3bn) of the needed investment was financed by China Eximbank.

The railroad is the first electrified transnational railway in Eastern Africa, running from Addis Ababa, the capital of landlocked Ethiopia, to the port of Doraleh in neighbouring Djibouti, which is strategically located at the point where the Red Sea meets the Indian Ocean, thus linking Ethiopia, and other landlocked countries in the Horn of Africa to the port in Djibouti. China has also invested heavily in Djibouti’s maritime industry to ensure efficiency and security of the maritime facilities, infrastructure, goods, and services.

The Chinese government has continued to provide much needed capital and finance into the continent which generally struggles to secure cheaper affordable financing particularly to develop desperately needed infrastructure.

Such infrastructure development is important to linking African countries, facilitating intra-continental accessible easier movement of goods, people, and services allowing for the expansion of intra-continental, intra-regional and interstate trade, which is historically predominantly outward looking.

Chinese driven continental infrastructure and logistics projects will immensely contribute to the continental goals towards the African Continental Free Trade Area (AfCFTA). The AfCFTA aims to create a single market of over 1.2bn people in Africa with a combined GDP exceeding $2.5 trillion (R46.3 trillion).

Since the end of the Covid-19 pandemic, Chinese lending to Africa has sharply grown again. According to the Global China Initiative at Boston University, China has committed billions of dollars into new construction projects fuelling record two-way trade boosting the African continent’s modernisation by fostering mutually beneficial win-win cooperation.

The Griffith Asia Institute at Griffith University in Australia says that Chinese investment in Africa increased by 114% in the past year with increased financing towards critical minerals, oil, the energy transition, agriculture, and manufacturing. China has remained Africa’s largest trading partner for 15 years straight. In the first four months of this year, China-Africa trade reached $95.4 billion (about R1.7 trillion), up 4.1% year-on-year as Chinese imports from Africa reached $39.5bn (R613bn), up 11.4% year-on-year, demonstrating strongly surging momentum.

While the BRI projects have yielded significant socio-economic gains for the continent, this year marks a significant year for China-Africa relations, with the holding of the Forum on China-Africa Cooperation (FOCAC) slated for later in 2024.

The FOCAC brings together 53 African nations and China, and will aim to deepen co-operation under the BRI and the three major global initiatives, fostering a higher-level China-Africa community with a shared future. African countries are crucially leveraging Sino-Africa relations to foster defining equitable global relations within initiatives such as the BRI, the Global Development Initiative (GDI), the Global Security Initiative (GSI)and the Global Civilization Initiative (GCI) drawing attention to the need for just, equitable, mutually beneficial development capable of transforming the living conditions of Africans.

The FOCAC Is a unique platform that allows African countries and China to discuss their mutual needs and achievements every three years as equal partners, providing an opportunity for frank discussions about what Africa needs from China and vice versa.

As African countries continue to bolster socio-economic progress and political stability in the continent, and seek more friendly multilateral conditions, the FOCAC in particular, and Sino-Africa relations broadly, could offer an important path for Africa’s development that other parties could replicate.

Gideon Chitanga, PhD is a Post Doc Researcher at Centre for Africa China Studies, University of Johannesburg.