Non-DAC Round-Up: Chinese Investment in Africa Since FOCAC 2012
Debate continues over the effectiveness of Chinese aid to Africa, but neither side can ignore the magnitude of the economic and political relationship.
The special relationship between China and Africa drew both criticism (here and here, for example) and acclaim (examples here and here) in 2012. Total China-Africa trade reached $166.3 billion in 2011, making China the single largest trading partner in the region. Estimates of Chinese-African development cooperation--whether defined broadly or narrowly--range between $1.5 and $25 billion a year. Debate continues over the effectiveness of Chinese aid to Africa, but neither side can ignore the magnitude of the economic and political relationship.
Understanding the strategic significance of Sino-African relations, senior officials such as the Chinese Premier, the South African President, the Kenyan Prime Minister, and the UN-Secretary General attended the July 2912 Forum on China-Africa Cooperation (FOCAC) in Beijing.
According to one African minister:
What is stressed on the forum is that China-Africa cooperation is win-win cooperation. Africa
needs China for technology transfer and investment; China needs Africa for raw material and
other things. This is the reason why so many state leaders and ministerial officials from Africa
come to attend this forum.
But the conference was more than just rhetoric about cooperation. In his opening remarks, Chinese President Hu Jintao pledged a record $20 billion in development finance to Africa over three years--double China’s commitment in 2009.
Since then, a flurry of China-Africa cooperation agreements have emerged, among them:
- In Nigeria, China offered a total of $1.1 billion in loans to build new commuter railways to the
capital, improved internet connections, and new airport terminals in four cities.
- Zimbabwe’s President Robert Mugabe inaugurated a new defense college just north of Harare,
built by Chinese state firm Anhui Foreign and Economic Construction Company (AFECC) with
a $98 million loan from the China’s Export and Import Bank. Days later, the Chinese firm
Guangdong Bureau of Coal Geology held talks with the Zimbabwean government to build a $3.5
- Liberia announced a $60 million agreement with China to build a new complex for ten
government ministries and agencies in Congo Town. It will be the second largest Chinese-
financed infrastructure project in Africa, behind the $200 million African Union headquarters in
- After securing a $2.5 billion oil-backed loan from Beijing, South Sudan will fund Chinese
companies to build five new university campuses. Despite its rhetorical commitment to not use
any form of conditionality in investment decisions, China has been caught in the diplomatic
standoff between its long-time ally Sudan and the more oil-rich South Sudan. With millions
invested in the oil industries of both nations, China continues to play a role in negotiations to
resume South Sudan’s export of oil through its northern neighbors.
One wonders how the continued rise of such Chinese-financed African development will be covered by the African media, especially after the controversial expansion into Nairobi by Chinese state news agencies, Xinhua and CCTV. Critics say these news juggernauts are merely providing state-approved propaganda to quell African resistance to perceived Chinese domination, while CCTV insists that by giving a platform to African journalists, it avoids the biases of Western media. As CCTV’s managing editor said:
We try to keep a balance...We are not only talking about war, diseases or poverty, we also focus
on economic development.
AidData tracks development resource flows from a wide variety of non-DAC sources. To help our readers and users stay apprised of the activities of Non-DAC development finance institutions, we are launching a semi-regular “Non-DAC Round-Up” on The First Tranche. This continues our blog series focused on emerging and Non-DAC actors in the development field. Past posts can be found here.
Brian O’Donnell is an AidData Project Manager at the College of William & Mary. He oversees AidData's data-sharing partnerships with emerging and non-traditional donors of development resource flows.
The views expressed here are those of the authors alone, and do not necessarily reflect the views of the institutions to which the authors belong.