• China has played a key role in paving the road for the construction of the Grand Ethiopian Renaissance Dam (GERD), changing the historical balance of forces between Egypt, Sudan and Ethiopia.
• The ongoing dispute and mutual distrust between the riparian states is placing increasing pressure on China’s international diplomacy, and in particular its non-interference policy.
• Contrary to Beijing’s rhetoric, China’s strategic diplomatic, political, economic and security engagement suggests that it is evolving towards increasingly proactive geopolitical intervention.

China’s growing economic, political and diplomatic foothold in Africa is often told in alarming terms of natural resource extraction, debt traps and neo-colonialist land grabs. Amidst local African instabilities and conflicts, Beijing has continued to publicly pledge its non-interference policy, presenting itself as a neutral ‘no strings attached’ alternative to the political conditionality of the West. Yet perhaps China’s most consequential participation in Africa’s evolving political economy is one which has rarely been scrutinised. In the last decade, Chinese actors have been instrumental in financing and constructing ambitious hydro-infrastructure projects across Africa, fuelling the continent’s unprecedented ‘dam boom’. Moreover, China’s entanglement in the intrastate dispute over the construction of Africa’s largest hydropower plant, the Grand Ethiopian Renaissance Dam (GERD), suggests that Beijing’s non-interference principle is becoming increasingly difficult to sustain.

In the 1980s and 1990s, when the World Bank ceased funding major hydroelectric projects in the developing world, African dams appeared destined to become a historical relic, associated with cost overruns, human displacement, and extensive environmental damage such as the flooding of fertile land. The game changer for Africa’s energy infrastructure, observes Prof Harry Verhoeven of Columbia University and convenor of the Oxford University China-Africa Network (OUCAN), was China. Beijing was consequential for the Nile basin in two fundamental ways: (1) it emerged as an alternative funder of large-scale development projects, and (2) Chinese actors had the technical expertise, political support and proven domestic track record to build hugely ambitious dam programmes.

“China’s return to the region changed the balance of forces between Egypt, Sudan and Ethiopia,” Verhoeven says. Despite being a downstream country, Egypt has historically been the ‘hydro-hegemon’ of the Nile — the state with the largest population, wealthiest economy, strongest military forces, and closest ties with great powers like the United Kingdom (until the 1950s), the Soviet Union (until the 1970s), and currently the United States. For most of the twentieth century, the Blue Nile was dominated by Cairo, and, to a lesser extent, Khartoum, as was legally established by the controversial 1929 and 1959 ‘Nile Agreement’ treaties. But in the wake of Egypt’s destabilising Arab Spring, Ethiopia’s 2011 launch of the GERD radically altered the region’s hydropower dynamics, aiming to catapult the country’s economy from aid dependency to an African hegemon.

While Addis Ababa has financed much of the project domestically, Beijing has provided significant funds for related infrastructure. “China sees the building of infrastructure, usually at a profit for Chinese state-owned companies, as a way to increase influence within African governments,” says Dr David Shinn, former American ambassador to Ethiopia and professor at the George Washington University’s Elliott School of International Affairs. In 2013, China granted US $1.2 billion in loans to build power transmission lines between the dam and local towns and cities. Following a 2019 visit of Prime Minister Abiy Ahmed to Beijing, China promised an additional US $1.8 billion to advance the expansion of Ethiopia’s renewable energy sector. Chinese companies — including Sinohydro, the Gezhouba Group, Voith Hydro Shanghai and the state-owned China International Water and Electricity Corporation — have also been central to the construction of the dam. Ethiopian Electric Power (EEP) contracted China’s Gezhouba Group for US $40.1 million in 2019, expecting them to “work aggressively in partnership with other companies” to finalise the GERD on schedule.

It is a common misconception, Shinn observes, that Chinese infrastructure projects in Africa are altruistic “investments” rather than profit-led “commercial deals”. “Most Africans are not aware that this is how it works,” Shinn says. “They assume incorrectly that it is a gift from China or an “investment” by China. It is an investment by the African government because it must eventually pay the bill.” In 2011, Ethiopia’s late Prime Minister Meles Zenawi remarked that “China has been playing an irreplaceable role in our economy. It has unparalleled contribution toward funding infrastructure activities.” Hailemariam Desalegn, who was deputy prime minister at the time, emphasised the comparative advantage of Chinese loans to Washington Consensus-style reforms: “We like the Chinese way of doing things, because they don’t say ‘do this, don’t do that’ — there are no preconditions.”

But the absence of political preconditions has become increasingly unsustainable for Beijing. Whereas China has historically fostered diplomatic and economic partnerships with Sudan and Ethiopia, the last 10 years have evinced a growing intensification of Chinese interest in Egypt, who perceives the GERD as an “existential threat” to the country’s water security. By the end of 2021, 80% of the dam is projected to be complete, with an approximate timeline of seven years to fill the basin. Egyptian authorities have demanded Ethiopia to decelerate in order to reduce the strain on Egypt’s water supplies and prevent the further loss of arable land.

Following Ethiopia’s rejection, Omar Semeida, head of Egypt’s Conference Party, called on China to “exercise more diplomatic pressure on the Ethiopian government in a bid to spare the entire region any risk of instability, and to sign a legally binding agreement with the downstream countries”. But because of China’s desire to maintain its three bilateral relationships, it has been reluctant to exert pressure on any of the riparian states beyond generic statements. “What is driving this is China’s own insecurities,” suggests Verhoeven, “the fear of being caught in a negotiation or context that [Beijing] doesn’t fully understand or cannot control.” When it comes to the Nile infrastructure, Verhoeven adds, “China is everywhere. Yet when it comes to the crux of the issue, it’s nowhere to be seen.”

In the last 15 to 20 years, China’s strategic geopolitical position has evolved from a complete system of non-intervention to having extensive military presence in Mali, South Sudan and Djibouti. “China’s involvement in Sudan and South Sudan, where it has significant oil interests, is arguably a case where China has interfered in African internal affairs,” says Shinn. Beijing’s dilemma is that the natural resources required to sustain domestic economic growth are frequently located in territories threatened by political instability and armed conflicts. Incidents of Chinese workers being targeted, rebel attacks on Chinese-operated oil facilities in Sudan, and protests following the failure of Chinese-constructed dams to meet basic environmental standards indicate the growing risks underlying Sino-Africa relations. Beijing’s advance towards proactive mediation and conflict resolution can be perceived within a larger trend of great powers taking opportunities to expand influence abroad. “As the engagement matures,” notes Verhoeven, “the perception of opportunity shifts to that of risk, from an offensive strategy to a defensive strategy. The tendency of great powers is to increasingly translate that risk into political influence. Soft power becomes translated into something harder.”

Domestically, the non-interference principle has remained part of Beijing’s rhetoric that promotes “building a community with shared future for mankind”. In July 2021, Zhang Jun, permanent representative of China to the UN, called for the resumption of negotiations between Ethiopia, Egypt and Sudan, emphasising that “China sincerely hopes that the three countries, in the spirit of friendly cooperation, will resume dialogue and consultation as soon as possible”. Yet China’s reluctance to intervene with the Nile dam conflict, Verhoeven suggests, has little to do with the non-interference policy: “it has everything to do with China’s growing exposure to Egypt and its uncertainty about how to manage a multilateral, transboundary River Basin context – much more than any principle developed in 1949.” With so much at stake in the construction of the GERD, China is being increasingly pressured to assume a more active role in the dispute. If Beijing continues to cite the non-interference policy, it risks undermining the relationships fostered with both Addis Ababa and Cairo, and jeopardising future partnerships.

The confrontation between Africa’s riparian states illustrates how dynamic, complex and contradictory the evolving politics of water security are at local, regional and global levels. As the climate crisis is putting unprecedented pressure on water and food supplies, the management of transboundary resources is more pertinent to global peace and security agendas than ever before. While resource scarcity can precipitate mutual distrust and intrastate conflict, it could also be used to encourage regional and international cooperation. Inger Anderson, Executive Director of UNEP, observed that the Nile has sustained livelihoods in Egypt, Ethiopia and Sudan for thousands of years. “Well-planned hydraulic infrastructure on a shared river course can be a source of enhanced collaboration, and need not be a zero-sum game,” she noted.

Similarly, the Nile conflict could offer a unique opportunity for collaboration between great powers like China, the U.S. and Russia, who have traditionally been locked in a geopolitical power competition. Amidst growing concern about a New Cold War, Beijing and Washington could use their respective water diplomacy with the Nile States as a stimulus to resolve bilateral tensions. Particularly as we draw closer to the “biggest threat modern humans have ever faced” – inevitable and imminent climate change – building trust, finding compromises and concentrating on mutual interests has never been more crucial.

This article gives the views of the author, and not the position of the China Foresight Forum, LSE IDEAS, nor The London School of Economics and Political Science.