China's $51B African investment: Trade freedom or influence?
During the September China-Africa forum, Chinese President Xi Jinping committed to investing $51 billion in Africa and eliminating tariffs for all developing countries, including 33 African nations. In early December of the previous year, China fulfilled the second of these promises.
Beijing states that its zero-tariff policy demonstrates a fair approach to African countries, offering concrete actions and encouraging modernization, countering Western accusations that China exploits the continent.
China eliminates tariffs for African countries
However, not everyone in Africa is impressed by the duty-free trade policy. Many economists remind us that previous trade agreements between China and Africa have primarily benefited the Asian economic power, rather than African countries.
"This is nothing but expanding its influence in Africa," which will do little to help underdeveloped economies. It is a component of China’s competition with the United States in Africa," said Tadele Ferede from the University of Addis Ababa to PAP.
China becomes Africa's largest creditor
In the past 20 years, China has become the largest bilateral trading partner of Sub-Saharan Africa. Approximately 20% of exports from this part of the continent go to China, and about 16% of Africa’s imports come from China, according to International Monetary Fund (IMF) data. The year 2023 was a record year for trade exchanges, with total trade volume reaching $282 billion.
Africa mainly exports metals, mineral products, and fuel to China, which make up about three-fifths of these exports. On the other hand, it primarily imports electronics and machinery from China.
China has also become Africa’s largest creditor, providing funding for mining, energy, and infrastructure projects across the continent. As recently as 2005, China’s share in the total public debt of Sub-Saharan Africa was less than 2%, but by 2021, this debt had exceeded $134 billion, rising to about 17%. The most indebted African countries to China are Angola ($21 billion), Ethiopia ($6.8 billion), Kenya ($6.7 billion), and Zambia ($6.1 billion).
