BEIJING — Chinese investment in Africa has exploded in recent years. The country is Africa’s largest trading partner and Sino-African trade is already more than twice that of trade between the United States and Africa and is expected to double by 2020. In December of 2015, it was announced that China invested $60 billion into the African continent through direct investment and loans.
With so much economic activity between the China and Africa, it raises the questions of why China is investing in Africa and what effects this economic activity is having on the African people.
One reason why China is investing in Africa is that it is a prime region for Chinese economic development.
China’s booming industrialized economy has incited a greater need for raw materials and fossil fuels. Africa is rich in oil, agriculture and the minerals needed to sustain economic growth. Africa is also experiencing rapid population growth and the amount of people on the continent is expected to double to 2 billion by 2050. To a nation experiencing rising labor costs, the amount of cheap labor in Africa is very appealing.
China’s other goal for investing in Africa is to spread its geopolitical power.
As China has developed, it has attained a great interest in becoming a global power like the United States. On average, African nations that support Chinese foreign policy goals receive much more aid and investment than nations that are less politically cooperative.
China isn’t the only one benefitting from this relationship. The African continent has seen significant economic development.
Trade with China has created thousands of jobs for Africans. Africa is also making gains from Chinese investment in infrastructure. Money from the Chinese state, banks and businesses has been pumped into roads, railways, schools, hospitals and airports. All this helps close the infrastructure gap that held African development back.
China has also aided Africa against threats to the continent. Chinese doctors played an important role in combatting the 2015 Ebola outbreak, and the country shows a greater commitment to assisting U.N. peacekeeping missions in Africa. China also financially supported the African Union military and counterterrorism efforts to keep Chinese presence in Africa safe from threats like ISIS.
However, the impact of Sino-African trade hasn’t all been positive.
Chinese goods have flooded the markets and have put many local African producers out of business. The African infrastructure projects have been carried out mostly by Chinese workers and companies rather than local companies. Some Chinese companies that do employ Africans pay their laborers unfair wages and employ them in inhumane conditions. Critics have also raised concerns that many of the trade agreements between China and African nations are heavily one-sided in China’s favor.
Despite these downsides, many Africans and foreign policy experts have hopes for continued progress in the region. Across the continent, over 60 percent of people have positive feelings about China’s economic activities in Africa. Other nations like Turkey, Malaysia and Brazil move towards greater investments in Africa.
The successful impact of China on Africa’s economy has also encouraged Western nations to attempt to use trade policy to assist African development through programs like Aid for Trade.
– Carson Hughes