After nearly 25 years, the Forum on China-Africa Cooperation has become backbone of China-Africa relations. Shirley Yu looks at how the partnership has changed over the last quarter of a century.
This year, a global superpower pledged to invest over $50 billion of capital into Africa by 2027. It plans to finance and construct free trade zones, industrial parks, processing facilities, assembly lines, and digital infrastructure to create the industrial and trade arteries of the African single market. The same country’s private sector took the lead in delivering Africa’s renewable energy while committing to training African talents in the manufacturing, renewable, and tech industries. Generous scholarships were offered to attract aspiring African students to study in its universities, who would then be fast-tracked to receive job opportunities in the local markets.
In the same speech, the country’s leader supported Africa’s efforts to ensure peace and security but entrusted African leaders to tackle regional security challenges “the African way” This leader recognised the right to economic development as a fundamental human right. Not just a means to an end; prosperity is an end in itself.
The speech did not come from America’s Joe Biden but from China’s President Xi Jinping. Should the commitments it contained raise caution and suspicion because they came from China? Does that diminish the intrinsic worth of the agenda laid out in the speech?
Xi made the above pledges in September, in the presence of leaders and envoys of 53 African countries in Beijing, where they were celebrating a quarter-century of the Forum on China-Africa Cooperation (FOCAC). Nearly twenty-five years in the making, FOCAC has become the bedrock of China-Africa relations.
A quarter-century of FOCAC in review
Created in 2000, FOCAC tri-annually gathers African and Chinese ministerial leaders to formalise the priorities of cooperation over the coming three-year period. The targets set by each Forum are usually articulated in numerical detail, making them measurable and accountable. Akin to China’s own five-year plans, the Forum is backed by the philosophy: “Crossing the river by feeling the stones.”
Over 25 years, FOCAC has continuously defined the priorities, capacity, and direction of China-Africa cooperation. In 2000, when FOCAC was created, China and Sub-Saharan Africa were near peers in economic development. Both had GDP per capita below $1,000. Both were exporters of labour and importers of foreign capital and technology, and they were heavily reliant on Western markets. China was a marginal power on the world stage that had very little capacity to forecast its own global future, let alone envision continental cooperation beyond trade and mutual political support at the multilateral fora.
Chart 1: GDP Per Capita (current $) China, Sub-Saharan Africa
From this humble beginning, FOCAC has grown into a platform that spans a full spectrum of economic, technological, cultural, and political objectives. Today, China plays an indispensable role in Africa’s trade, investment, financing, manufacturing, technology, renewable energy, and human capital development.
Politically, Africa and China cooperation is supported by Xi’s worldview of a multipolar world where national and regional affairs are managed in the Westphalian spirit – your region, your way. This belief is genuinely held, that it implies a rejection of the current US-led world order is a bonus.
At the FOCAC Summit in September, President Xi upgraded China’s diplomatic relations with 53 African nations to strategic partnerships despite the vast divergence in the depth of the economic ties (Eswatini was not included because of its diplomatic ties to Taiwan).
China and Africa have now arrived at an all-weather common destiny that transcends economics. How did the relationship grow so comprehensively so fast?
Phase one: Ideal partners in trade
In 2000, China and Africa traded a meagre $10 billion. Eight years later, at the onset of the Global Financial Crisis, bilateral trade had grown to $100 billion. By 2015, two-way trade further doubled to $200 billion. In 2023, two-way trade topped $282 billion, ballooning over 28 times in 23 years. China has consistently been Africa’s largest trading partner since 2008.
China has prioritised exports in its global trade. However, with Africa, China has always sought a more balanced approach. Between 2000 and 2008, Chinese imports from, and exports to Africa both expanded over nine times, with its exports only slightly outpacing imports.
In 2003, China removed tariffs on 440 product categories imported from Africa’s least developed countries (LDCs). As of September 2024, all imports from 33 of Africa’s LDCs became exempt from Chinese tariffs. The policy immensely benefits Chinese consumers while boosting Africa’s primary goods trade.
Even as China and Africa’s economic interests expand, trade has remained a foundational pillar of the relationship.
Phase two: China as the exporter of capital
In 2006, at the fourth FOCAC, China emerged as a burgeoning exporter of capital to Africa. The initial aid, grants, and concessional loans have been vastly eclipsed by the large-scale commercial lending programs delivered by the Chinese state policy banks, development funds, and multilateral development institutions during the Xi Jinping era. China has grown into a formidable creditor, investor, and supply chain integrator in Africa.
China is Africa’s largest sovereign creditor. According to International Debt Statistics, China lent approximately 42 per cent of Africa’s total bilateral external debt in 2022. When multilateral institutions are included, China holds 16.8 per cent of Africa’s outstanding sovereign debt.
There has been a modest recent regrease. This share represents a slide from a peak in 2019 when China accounted for 43 per cent of Africa’s total bilateral lending and 19.3 per cent of Africa’s sovereign debt total. On an absolute scale, Chinese sovereign credit to Africa plateaued in 2021, and has slightly declined since.
Chinese foreign direct investments in Africa follow a similar trend. Since the launch of the Belt-and-Road Initiative in 2013, China has accelerated its financing and outbound direct investments in Africa’s infrastructure. The scope encompasses physical infrastructure from power grids to transportation networks and digital infrastructure from telecommunications to submarine cables.
At the 8th FOCAC meeting in 2021, China pledged an unprecedented $10 billion to be deployed by its private sector in Africa over the next three years, bringing private companies to the frontier of China’s supply chain offshoring in Africa. It also announced a shift of China’s investment focus from large-scale infrastructure to “small and beautiful” projects, echoing the investment preference of Chinese private companies. This strategic shift also correlated with the plateau of Chinese outbound FDI (by flow) in Africa over the 2018-2021 period.
The 9th FOCAC Summit in 2024 focused on Africa’s industrialisation, agricultural modernisation, and green energy. China unveiled plans to build five regional industrial clusters and 10 supporting industrial parks in addition to the 100 ports China has already helped build, finance, or operate across Africa. China plans to synchronize industrial production among the regional centres to facilitate production outputs and boost trade. A further $51 billion capital, including $10 Billion foreign direct investment, was pledged at the 2024 FOCAC to accomplish these objectives.
Phase three: China as the exporter of technology
Since Beijing launched its Made in China 2025 policy in 2015, China has begun to amass strategic advantages in telecommunications, financial technology, and cross-border logistics and e-commerce among others. Its success in these areas was both deliberate and accidental. When China started to move into the digital era, it lacked the financial and technology infrastructure the West had developed over decades such as a sophisticated credit card payment system, telephonic and postal service networks, or data access via desktops. As a result of this gap, China invented technology alternatives that are more suitable for the digital era and jumped a tech generation directly to focus on mobile connectivity. Africa lacked the same fundamental infrastructure as China and therefore, when new Chinese tech moved into Africa, it wasn’t trying to fit into an old system. Both were built to work with the new digital realities.
As China accelerated its technological export over the past decade, Chinese tech products, ecosystems, and tech standards began to spread in the areas of digital services, telecommunications, renewable energy, and smart and advanced manufacturing across the Global South, in no region more successfully than Africa.
Since the 2021 FOCAC, China has begun to systematically focus on tech knowledge transfer and create local “jobs through training” in Africa. As of 2024, 17 Luban Workshops have been established in Africa, providing vocational training from automobile maintenance and assembly to 3D printing, In the 2024 FOCAC, China committed to training an additional 60,000 polytechnical talents in the digital economy, clean energy, and joint R&D programs in Agri-tech, health sciences, and biotech. It also promised to train taxation and customs specialists in Africa. It told Chinese companies already investing in Africa to create one million jobs for local Africans.
Phase four: China as the exporter of public goods
Since the outbreak of Covid-19, China’s vision to deliver public goods in Africa has become more systematic, most prominently seen in public health, education, media, and security. Covid served as a catalyst for such efforts, but it was not the cause. China’s endeavour to serve as Africa’s public goods provider is inevitable. Because of its myriad deeply entangled and long-term economic commitments in Africa, China needs to win the hearts of the people, solidifying its economic power with its soft power.
China has initiated large-scale education and academic exchange programs through its universities, vocational workshops, and public policy schools for African leaders. At the 2024 FOCAC, China plans to create 25 China-Africa-focused think tanks. It wants to invite 1,000 African political members to visit China over the next three years. It also initiated China-Africa media innovation cooperation, including both conventional media and digital content creators.
China has also focused on improving Africa’s public health infrastructure. At the 2024 FOCAC, China promised to send 2,000 Chinese public health professionals to Africa and help establish five regional public health and disease control centres. China also asked its biotech and pharmaceutical companies to invest in Africa’s drug and vaccine production value chain, incubating Africa’s indigenous biotech industry.
China is engaged in training security and military personnel for Africa. At the 2024 FOCAC, it offered $165 billion in military aid, agreed to train 6,000 military members and 1,000 police, and invited 500 young military cadets to China by 2026. In addition to training, intelligence sharing, and coordination over anti-terrorism activities, China has a strong interest in ensuring naval security around the Gulf of Aden, the Gulf of Guinea, the Indian Ocean, and the Somali Waters.
China plans to invest in 500 philanthropic projects focused on women’s and children’s health, education, rural development, and clean water. Global philanthropy, modelled on the Western development approach, is a new experiment for China. This marks a new and noteworthy milestone for China’s pursuit of its regional soft power.
FOCAC and its future prospects
China and Africa have undertaken conscious steps to build alternative regional institutions to the post-WWII global architecture. The BRICS+ has already welcomed Egypt and Ethiopia as formal members. Algeria, Nigeria, Senegal, Sudan, Tunisia, Mali, and Zimbabwe have either applied or expressed a strong interest in joining.
The China-headquartered Asian Infrastructure Investment Bank and the New Development Bank have been proactive in supporting tech infrastructure development in Africa for over a decade. In the 2024 FOCAC, Beijing joined Africa’s call for reforms at the International Monetary Fund (IMF) and supported Africa creating its own credit rating agency to improve fairness. The current global rules are extremely unfair for Africa. For example, the IMF would not lend to African countries with a Debt/GDP of 60 per cent. However, most of the West has a Debt/GDP over 100 per cent and have no issues with borrowing. Further, Beijing invited African countries to raise RMB-denominated debt in the Chinese Panda bonds market, incentivising Africa’s de-dollarisation.
China’s support for the burgeoning African Continental Free Trade Area and mapping infrastructure corridors from China’s western regions to the centre of Africa has the potential to reshape a new century of global trade by creating a regional free trade framework in the Indian Ocean region when trade protectionism is increasingly apparent.
At the conclusion of the 2024 FOCAC, Beijing went to great lengths to support an African-centric agenda, from “Made in Africa” to security the “African Way.” A vote for Africa’s rise is a veto for the continuation of a unipolar world order, which echoes China’s vision.
The moral debate
China has pledged strong support for Africa to develop its burgeoning manufacturing and processing industries, upgrade its agriculture production through technology, connect the transportation arteries of a vast continent, power Africa with renewable energy, build technology infrastructures suitable for AI, and most importantly, transfer knowledge and create jobs to sustain Africa’s continuous industrialisation.
It is difficult to argue against the intrinsic merits of such efforts. Is there a moral panic because it is China doing the offering? Is there a bigger threat that comes not from China’s doing too much but the West’s doing too little?
The phased elevation of China’s endeavour in Africa – by exporting its labour (through trade), capital, technology, and public goods – to cement economic integration with Africa is not a unique process. China learned the idea from its own four-decades of growth experience. The West continued to export capital, technology, transfer knowledge, and taught institutional building to China, which made it what it is today. Africa is just having its turn, except that this time, China is on the giving end.
One may argue that China’s commercial lending rates are too high, the return on investments too low, the environmental and anti-corruption standards too lax, and the cost advantage supported by state subsidies too unfair. These are technical, and adjustable policies open for negotiations. The enduring transformation brought by FOCAC for Africa, China, and the future world arises from a different set of issues.
They principally arise from China’s success in establishing technology standards and building functioning multilateral institutions with Africa. Technology standards are essentially zero-sum. An economy or a large single market is not likely to adopt two competing technology standards simultaneously. Once the technology standard is adopted, it also has the tendency to be sticky. Institutions work in much the same way. A regional free trade agreement fundamentally discriminates against outside partners. Regional financial institutions will likely adopt rules that reset voting rights among their members, favour local currency exchanges, and build new governance mechanisms, to override the ill-functioning global institutions.
But here is why we should be optimistic. Africa’s becoming an industrial power shall not be zero-sum. It will be a significantly positive sum. The key to Africa’s lasting prosperity is the same as the US’s. President Joe Biden introduced re-industrialisation on a historic scale after decades of shifting its industries elsewhere. The key to African economic growth will begin by creating value-added industries at home and moving up the global value chain. In the 2024 FOCAC, it is no accident that 53 African nations echoed launching a continental-scale industrial policy for Africa, of which China is a committed partner.
Concluding the first quarter century of FOCAC, China is Africa’s symbiotic partner, one that looks committed to the continent for the short and the long term.
Photo credit: Republic of Benin used with permission CC BY-NC-ND 2.0
