China-Africa trade & investment relations: A shifting landscape

China recently hosted the 9th Forum on China to Africa Cooperation, a three-day summit that brought together African leaders in Beijing to strengthen ties with the continent. During the summit, China pledged over $50 billion towards projects in Africa, signaling a renewed commitment towards the continent's development. This financial pledge, although lower than previous years, demonstrates a sign of strengthening and deeper cooperation between China and Africa. Linda Calabrese, Senior Research Fellow and China-Africa expert at ODI, highlighted the importance of trade and industrial cooperation announcements made during the summit for fostering Africa's economic growth and potentially reducing dependence on partners like China in the future. One of the key questions raised was whether China's $50 billion pledge is a genuine investment in areas crucial for Africa's development or will further entrench the continent in debt. Calabrese pointed out that part of the investment is aimed at developing Chinese investment in Africa, particularly in sectors like transport, logistics, pharmaceuticals, and agro-processing. She emphasized that the pledge has a broader purpose beyond debt entrapment and will contribute to economic growth and transformation in African countries. Despite the significant decrease in China's funding for infrastructure development in Africa since 2001, particularly through the Belt and Road Initiative, there has been an uptake in investments. The strategy seems to involve a shift towards more commercial lending and investment in the African infrastructure sector, allowing Chinese companies to operate in the construction market without incurring debt issues seen in past years. China's charm offensive in Africa, positioning itself as a leader of the global south, has sparked a response from the West. Calabrese suggested that rather than competing to bring China down, Western countries should focus on providing better offers for African countries. The West could support African nations in developing their infrastructure strategies and fostering genuine competition that benefits African countries. In terms of sectoral allocations, Calabrese highlighted the importance of supporting Africa's continental trade pact, the African Continental Free Trade Area. She noted the need for China and the West to support this project to create an intra-African market that benefits African countries the most. By aligning actions with the goals of the trade pact, real partnership and solidarity can be demonstrated. Discussing trade ties, there have been calls from African leaders to rebalance the trade relationship with China. While achieving zero trade balance may not be necessary, Calabrese emphasized the importance of African countries exporting more to all partners. Leveraging support from China in infrastructure development to increase production and exports to various markets, including within Africa, can help strengthen Africa's position in global trade. Overall, the $50 billion pledge from China to Africa represents a significant opportunity for deeper cooperation, economic growth, and development on the continent. As partnerships evolve and strategies shift, the focus remains on leveraging investments to drive sustainable development and enhance Africa's trade relations with global partners.