A FEW NOTES AND REFLECTIONS ON CHINA-AFRICA RELATIONS
Introduction
The author of this article is Mr. Fred Kan, one of the founding partners of DKL Hong Kong¹. Catherine Shi, partner and Head of Overseas Business of DKL, wishes to share with you Mr. Kan’s insights on China-Africa relations.
A FEW NOTES AND REFLECTIONS ON CHINA-AFRICA RELATIONS
Fred Kan，DKL Hong Kong，Founding partner
These notes and reflections are prepared for my presentation at the Annual General Meeting on 19 May 2022 of Lex Africa, a legal alliance of leading law firms in Africa in over 20 countries and Africa’s largest legal alliance.
Africa is the 2nd largest continent in the world with 54 countries of varying degrees of development. Many of them are often saddled with internal strife, and sometimes even with border conflicts.
Therefore, it may be difficult or even impossible to generalise on a such a broad subject as China-Africa relations.
I am much aware that, as a Hong Kong lawyer, I shall be speaking out of my depth on the subject to a group of prominent African lawyers. However, I hope these notes and reflections may provide some useful materials, or even points of departure, for an interactive discussion.
Zheng He
On 30 June 2005, Xinhua News Agency published a news story on Mwamaka Sharifu, a 19-year-old graduate of Kenya’s Lamu Girls Secondary School. She was granted a scholarship to attend university in China to study Chinese clinical medicine.
She was on a flight to China together with the mayor of Kenya’s Malinda City. They had been invited by the Chinese government to join the celebration of the 600th anniversary of the navigation from China to Kenya by Zheng He (1371-1433), China’s greatest ancient mariner, explorer, diplomat, and fleet admiral of Ming Dynasty’s gigantic treasure ships.
Sharifu was born in the remote village of Siyu of the Lamu Islands, where many pieces of ancient chinaware were unearthed. Legend has it that a Chinese vessel sank somewhere near the island hundreds of years ago. Some of the surviving sailors settled down in the island and married local women. They and their descendants gradually merged into the local community.
Many archaeologists believe the wrecked ship must have been one of Zheng He’s grand fleets, which visited Kenya’s Malindi, Mombasa and other east African ports in 1415.
Upon returning home, Sharifu will be a bridge between China and Africa. But the development of China-Africa relations is more than the story of Mwamaka Sharifu and her Chinese ancestors.
Lest we forget
In July 2019, UN ambassadors of 37 countries, including Algeria, Angola, Cameroon, Democratic Republic of Congo, Egypt, Eritrea, Nigeria, Somalia, South Sudan, Soudan, Zimbabwe, and other African states signed a joint letter to the UN Human Rights Council (UNHRC) defending China’s treatment of Uyghurs and other Muslim minority groups in Xinjiang.
In June 2020, 53 countries, mostly from Africa, declared their support for the Hong Kong national security law at the UNHRC.
China remembers.It is only through the longstanding and staunch support from African nations that China’s vision of an UN-centric rule-based world order may be underpinned and advanced.
The Forum on China-Africa Cooperation (FOCAC) is an official forum between China and all states in Africa with the exception of the Kingdom of Eswatini.
8 Ministerial Conferences and 4 Summits under FOCAC have been held, focusing on various programmes at the time for China-Africa cooperation in economic and social development:
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2000 |
Beijing, China (Ministerial Conference) |
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2003 |
Addis Ababa, Ethiopia (Ministerial Conference) |
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2006 |
Beijing, China (Ministerial Conference and Summit) |
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2009 |
Sharm el-Sheikh, Egypt (Ministerial Conference) |
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2012 |
Beijing, China (Ministerial Conference) |
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2015 |
Johannesburg, South Africa (Ministerial Conference and Summit) |
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2018 |
Beijing, China (Ministerial Conference and Summit) |
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2021 |
Dakar, Senegal (Ministerial Conference and Summit) |
The most recent FOCAC Ministerial Conference is the one held in Dakar in November 2021. Four documents were adopted at the Ministerial Conference:
(1)The Dakar Action Plan (2022-2024);
(2)the 2035 Vision for China-Africa Cooperation;
(3)the Sino-African Declaration on Climate Change;
and (4) the Declaration of the 8th Ministerial Conference of FOCAC.
The 2035 Vision for China-Africa Cooperation stands out as it is the first mid-to-long-term cooperation plan jointly developed by China and Africa.
In this document, China and Africa envision 8 areas of cooperation for the next 14 years:
(1)partnership in development agenda;(2)trade, investment and financing; (3)industrial cooperation; (4)green cooperation; (5)health; (6)people-to-people exchanges;(7)peace and security; (8) cooperation on global governance.
There will be closer Belt and Road partnership between China and Africa.
From the economic side, the Vision calls for balanced growth of bilateral trade, forecast to reach USD300 billion in 2035. China supports Africa increasing its export capacity, strengthens cooperation in inspection and quarantine of agricultural produce and food, and will import more non-resource African products.
China will invest another USD60 billion in Africa by 2035, especially in support of African agriculture, manufacturing, infrastructure, environmental protection, digital economy, blue economy, etc. It calls for further localization of Chinese enterprises in Africa.
China will continue to offer aid to Africa to the best of its capability and maximise the overall efficiency of assistance. China will mobilise all types of resources for financing cooperation with Africa to support the development of African SMEs.
Not much is said about infrastructure. It does not mention loans for funding infrastructural projects at all. Instead, the Vision is framed in the context of Chinese investments, enhancing African industrial, business and export capacity, etc.
The 2035 Vision for China-Africa Cooperation aligns with China’s own 2035 plan, Vision 2035, which was passed at the 5th Plenary of the 19th Chinese Communist Party Congress in 2020, to create a strong and technological advanced country, and to be a moderately prosperous society in all aspects by 2035.
A prosperous and friendly Africa will indeed help China in achieving its goals.
China-Africa cooperation and project dynamics under the Belt and Road Initiative
The Belt and Road Initiative (BRI) was proposed by President Xi Jinping in September 2013 as a way for win-win cooperation that promotes common development and prosperity and a road towards peace and friendship by enhancing mutual understanding and trust and strengthening all-round exchanges between China and mainly developing nations.
Under the BRI, China has lent African countries hundreds of billions of dollars to finance infrastructural and other projects.
Vehicles for project financing
BRI project financing is generally made through one or more of the following Chinese financial institutions:
——The Export-Import Bank of China
The Export-Import Bank of China (Exim Bank) is the main supporting force behind Africa's development and China-Africa all-round cooperation. It has been playing an active role in supporting China's commodities and technology to enter the global market and to promote African products in China. Up to now, the bank has financed more than 600 projects with loan balances outstanding exceeding 340 billion RMB. The bank is an ardent supporter of green development in Africa. For example, it has financed the Adama Wind Power Project in Ethiopia.
——The China-Africa Development Fund
The China-Africa Development Fund, more commonly known as CAD Fund, is a Chinese equity fund solely funded by China Development Bank, a Chinese government policy bank. The creation of the CAD Fund was announced as one of the “Eight Measures” for China-Africa relations at the Beijing Summit of FOCAC by Chinese President Hu Jintao. The aim of CAD Fund is to stimulate investment in Africa by Chinese companies in power generation, transportation infrastructure, natural resources, manufacturing, and other sectors. By the end of 2021, it has invested nearly US$6 billion in 37 African countries.
——Industrial and Commercial Bank of China
ICBC has become the main bank for the China-Africa cross-border RMB center. It has been able to do so is because ICBC is the single largest shareholder of Standard Bank, the largest commercial bank in Africa. Chinese enterprises are projected to invest no less than US$10 billion in Africa in the next 3 years. The China-Africa Cross-border RMB Center has opened its business in South Africa, Nigeria, Ghana, Kenya, Botswana, Zambia and other African countries to facilitate China-Africa trade and businesses.
——Bank of China
Bank of China is South Africa's first Chinese bank. In 2022, its Johannesburg branch will issue its first US$300 million Chinese-funded institutional green bond in Africa to support projects such as renewable energy, clean transportation, sustainable water and wastewater management.
——China Construction Bank
China Construction Bank has, in the past 3 years, provided financial support for 32 projects in 15 African countries, including South Africa, Ethiopia, Algeria and Ghana, involving transportation, information and communication, power and other fields. At the same time, it provides guarantee support for infrastructure, large-scale mechanical and electrical equipment procurement projects in more than 30 African countries.
——Agricultural Bank of China
In 2015, Agricultural Bank of China established a joint venture bank in Congo, China-Congo African Bank, being the first Chinese bank in Central Africa. Key customers are local enterprises, including Chinese-funded enterprises.
Some highlights of BRI projects/activities for 2022
—— Hygiene and Health
According to data from the African Center for Disease Control and Prevention as of April 27, 2022, the cumulative number of confirmed COVID-19 cases in Africa exceeded 11.42 million, the cumulative number of deaths was 252,135, and the cumulative number of cured cases was 10,788,122.
Sinovac Biotech Ltd. is assisting in the construction of a vaccine cold storage project in Egypt. The vaccine cold storage project is undertaken by the Egyptian branch of China State Construction Co., Ltd., covering an area of 2,800 square meters, and can store up to 150 million doses of vaccine after completion.
China BGI Group donated to the Nigerian Ministry of Health “Huo-Yan” air-membranes for COVID-19 testing. More than 20 Chinese technicians are currently helping Nigeria to combat the COVID-19 pandemic.
—— Infrastructure
Power Construction Corporation of China won the bid for the Congo (Brazzaville) Benji-Evo Road Renovation and Asphalt Paving Project under the STECOL brand. The project is the first milestone project in the 341 major projects under the National Development Plan (PND) for 2022-2026 in Congo (Brazzaville).
The Ceremony of Connection was held for the New Wami Bridge Project in Tanzania undertaken by Power Construction Corporation of China. All main materials are sourced locally in Tanzania and the project provides more than 500 local jobs.
China Energy Engineering Group Co., Ltd. received the official notice of winning the first bid for the operation and maintenance project of the MBR Sewage Treatment Plant in Ethiopia.
——Trade facilitation
The first batch of refrigerators delivered to the UK at Hisense's South African factory has been successfully shipped and will be officially put on sale in the UK market upon arrival. Hisense South African Industrial Park is a representative project of the Belt and Road Initiative jointly built by China and Africa. Manufactured White Goods are exported to Europe for the first time.
The Hunan-Guangdong railway-sea combined transport train was officially launched, providing door-to-door logistics service, shortening the full transportation time from Hunan to the port in eastern Africa by about 10 days. 2 new transportation routes from Changsha to Luanda in Angola and Abuja in Nigeria are in operation, providing more logistics channels to choose from for trade between China and Africa.
—— Digital innovation
To promote African products in the Chinese market, the "4th Shuangpin Online Shopping Festival & Good Things from Africa Online Shopping Festival" has been launched with creative activities for consumers. The theme of the festival was "Brand Quality, Enjoy Life”. It brings with it a wave of "African immersion", a unique experience for consumers.
Huawei and the Communications Regulators’ Association of Southern Africa cooperate in areas such as ICT training, technical support, and digital inclusion in Luanda, Angola, pointing out the future direction of development. Huawei has trained more than 50,000 talented people at its ICT Training Center in Africa.
Jiangsu Hengtong Optoelectronics Co., Ltd. led the construction of the PEACE (Pakistan and East Africa Connect in Europe) submarine optical cable. The submarine cable will help East Africa to meet future broadband capacity needs.
—— Green development
SEPCO3 (Shandong Electric Power Construction Corporation III) and Mitsubishi Corporation jointly signed the contract for the construction of the first phase of the Tulumoyeh Geothermal Power Station in Ethiopia. This is Ethiopia's first geothermal project, located in Adama, Oromia Province, with a total installed capacity of 50 terawatt. Power Construction Corporation of China’s earlier project, Adama Phase I and PHASE II Wind Farm project in Ethiopia, is the largest wind power project in Africa.
The 27th Conference of the Parties to the United Nations Framework Convention on Climate Change will be held in Africa. African countries will seek to further advance climate change priorities, such as loss and damage to climate change, climate finance, climate adaptation strategies, and desertification, etc. Global decarbonisation targets will correspondingly affect energy output plans and policies for the extraction of strategically transitional minerals.
—— Capacity-building
AVIC International undertakes the construction of the Ghana Vocational and Technical Training Upgrading Project, the construction of an examination center for the Ghanaian Ministry of Education and the construction of training centers for 15 Ghanaian vocational colleges. It provided 69 sets of modern vocational education training equipment to 23 Ghana vocational colleges, covering five vocations: machining, electrical and electronics, welding, auto repair and civil engineering.
AVIC International Project Engineering Company undertakes the construction under the Côte d'Ivoire Vocational Training School Project, with seven vocational training schools located in Abidjan, the political capital of Yamoussoukro and the north-central region of Côte d'Ivoire, providing laboratory planning, equipment supply, teacher training, after-sales service, four-year operation and maintenance period assistance to meet the needs of 14 major disciplines or vocations including machining, electronic and electrical engineering, automobile maintenance, welding and iron work, refrigeration and air conditioning, agricultural machinery, civil engineering, engineering machinery, food processing, and printing technology.
—— Cultural exchanges
“International Chinese Language Day” and “Chinese Culture Show” will be held in 2022. Students from many African schools will celebrate the day with Tai Chi demonstration, experiencing Chinese paper cutting, Hanfu and calligraphy, in order to have a taste of traditional Chinese culture.
COVID-19 has wreaked havoc in China and the world. This undoubtedly slows down China’s economy and the progress of the BRI. it leads also to a waning appetite in China for large foreign investments.
As for Africa, the pandemic is ravaging. Furthermore, commodity price crash has complicated African debt servicing. There is also a growing reluctance for African borrowers to enter into lending deals backed by natural resources such as oil and metals.
The question is, how will African nations mend and make do if China tightens Belt and Road?
Criticism
Nothing important in the world can escape criticism.
China’s relationship with Africa has been characterised as neocolonialist.
In his article, “Is China a New Colonial Power?”, appearing in the Diplomat on 9 November 2020, Amitai Etzioni, a University Professor and professor of international affairs at The George Washington University, wrote:
Critics argue that the People’s Republic of China (PRC) has become a neocolonial power. Although it does not hold the kinds of colonies imperial powers used to lord over, it is said to conduct itself as one of them. Thus, for instance, according to Jean-Marc F. Blanchard, a China scholar, “the general features of China’s relations with many countries today bear close resemblance to the European colonial powers’ relations with African and Middle Eastern countries in the 19th and 20th century. Among other things, we witness countries exchanging their primary products for Chinese manufactured ones; China dominating the local economy; countries becoming heavily indebted to the PRC; China exerting greater weight on local political, cultural, and security dynamics; and Chinese abroad living in their own ‘expat enclaves’.” While Blanchard adds nuance to this narrative in his own analysis, many scholars appear to take it as common wisdom.
Beijing’s new transnational infrastructure, like pipelines and highways, are viewed as initiatives to send more resources to the PRC. These projects are reported to deplete national treasuries. Moreover, Chinese projects and investments draw on few local suppliers and partners and contribute little to job creation, partly because they employ many Chinese laborers. Finally, China is said to doing more harm than good to the host countries because its cheap goods destroy local manufacturing.
Africa is depicted as the major victim of this new Chinese global abuse drive. China is said to propping up its own industries by extracting raw materials, such as minerals, fossil fuels, and agricultural commodities, from all over the world, with Africa as its main target. China is “present” in 39 African countries and is the continent’s biggest trade partner. China’s tens of billions of dollars in investments and loans are readily accepted by cash-starved African states, however they have come with many strings attached.
China is reported to issue loans to make countries beholden to the it; that they must be are paid whether through economic concessions, political support, or a combination of both. Although bilateral trade often grows in the wake of such deals, critics hold that the trade is skewed heavily in China’s favor, allowing the PRC to get resources while “import[ing] cheap finished goods of questionable quality that undermine local manufacturers.”
Going forward
The U.S. and China are in intense conflict. Some even call it a war in all but name. Although, luckily, it has not yet degenerated into a military one, the U.S. and its allies have thrown all their resources, including their propaganda juggernaut, into an all-out attempt to derail or dampen China’s aspiration for a peaceful rise.
President Biden made no bones about US intentions. He said shortly after his inauguration that he will not allow China to surpass the U.S. on his watch. But China, on its part, has no intention to surpass the U.S. or anyone else. What it aspires to is to better itself.
It is interesting to note that the Group of Seven richest democracies sought on 12 June 2021 to counter China’s growing influence by offering developing nations an infrastructure plan that could rival China’s multi-trillion-dollar Belt and Road initiative.
The G7 had been searching for a coherent response to the growing assertiveness of China after its surging economic and military rise over the past 40 years.
U.S. President Joe Biden and his G7 peers hope their plan, known as the Build Back Better World (B3W) initiative, will provide a transparent infrastructure partnership to help narrow the gap of $40 trillion needed by developing nations by 2035.
Under this scenario, it may be tempting for nations to play both sides to derive as much benefits as possible. As Winston Churchill once said, “We have no lasting friends, no lasting enemies, only lasting interests.”
Little, however, is known about B3W.
Will the BRI and B3W complement each other to benefit Africa, or will they lead to a vicious competition benefiting just a few?
Only history will tell.
The world has undergone tumultuous changes in the last three years, starting with the outbreak of the COVID-19 pandemic and now exacerbated by the still raging Russia-Ukraine War.
As pointed out by President Xi Jinping in the virtual summit on 8 March 2022 between him and French President Macron and German Chancellor Scholz, the combined impact of major global changes and the pandemic, both unseen in a century, has brought multiple global challenges that need to be addressed through global cooperation to bring about stability and certainty to a turbulent and fluid world. The world must have “a common, comprehensive, cooperative and sustainable security concept.”
Should there be a recalibration of the world order?
If so, where will China stand? And will Africa join hands with China and other developing nations to ensure that they will not be shortchanged in this new world order?
Again, only history will tell.
¹Fred Kan & Co. is the Hong Kong association of DKL. With over 40 years’ history, it has been steadily expanding to Mainland and Japan, as well as accumulating global resources. It’s a comprehensive Hong Kong law firm and is competent to handle substantial and complex matters without communication hindrances. Please take a look at the followed link if you wish to know more about DKL Hong Kong (http://www.fredkan.com/zh-cn/fred02/).
The above article does not consist of any legal advice. If you need any Hong Kong or overseas legal services, please contact the following person of DKL:
Catherine Shi, Head of Overseas Business, Email: catherineshi@deheheng.com
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