China-Africa Relations Expanding Beyond Cash Deals

China-Africa Relations Expanding Beyond Cash Deals

China’s president Xi Jinping is in South Africa for a China-Africa forum aimed at deepening economic and security ties. Such events are usually accompanied by top-dollar deals, but that there is also a new undercurrent shaping China-Africa relations.

How much does Africa mean to China? If an announcement by South African President Jacob Zuma is any indication, a lot.

“We have just witnessed the signing of 26 agreements that are worth 94 billion rand.”

That’s $6.5 billion in deals with South Africa alone – and it’s big numbers like that that have come to dominate discussions about China-Africa relations.

In one of 10 agreements signed Wednesday in Zimbabwe, China dropped $1.2 billion for a power project. And Nigeria’s president plans to ask China in coming days for another $20 billion for rail and power projects.

Moving beyond money

But China’s foreign minister Wang Yi said Thursday in South Africa’s capital that the relationship is about much more than money, and that President Xi is much more than just a gift giver for African leaders.

China-Africa cooperation, he said, through an interpreter, is about “making sure that this world will be fairer, more secure and more inclusive.”

To that end, the Chinese government has recently taken a new tack in Africa, pledging military aid to the African Union. China sent peacekeepers to northern Mali in 2013 and to South Sudan this year. And China recently announced plans to build a logistical navy base in the tiny East African nation of Djibouti.

New era

Analyst Martyn Davies, managing director of emerging markets and Africa at Deloitte Frontier Advisory, said Africa-China relations are evolving.

He described it as “China-Africa 3.0.” In the 1960s, he explained, China-Africa relations were about ideology as Africa was caught in a capitalist-communist tug of war. In the 90s, that evolved into a Chinese binge on African commodities.

What’s changed, he said, is that commodity prices are down. China’s economy has also slowed, and the nation has accordingly slowed down its investment in Africa by as much as 40 percent, according to official figures.

“It’s a very different environment. So I’m quite interested to see how this will play out and how [the] Chinese state capital is viewing the continent, and then how the continent responds to this going forward,” Davies said.

Demand for resources

Up to now, he said, China-Africa relations have had more to do with China’s appetite for resources than political interest.

“The real story for me is not so much the supply side, that is the supply side of capital coming out of China, but it’s more the demand side for resources going into China, which has really underpinned African growth,” said Davies.

According to Davies, the real benefits and quantitative growth Africa’s experienced in the past decade is because of China’s demand for the continent’s commodities. And that, he said, has absolutely nothing to do with capital support or geopolitics.

The coming talks between Chinese officials and African leaders are crucial to determining what comes next, Davies added. And a preview will be coming soon, as the China-Africa forum launches Friday in Johannesburg.


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