China ramps up infrastructure spending and trade ties at Africa summit while debt questions linger

China has pledged US$50.7bn in credit to support 30 new African infrastructure projects without promising any debt relief for existing projects, Reuters reports.

This follows the Forum for China-Africa Cooperation (FOCAC) held last week (4-6 September), at which Xi welcomed over 50 African leaders to Beijing for discussion on how to strengthen economic and diplomatic ties.

“We have always understood and supported each other, setting an example for a new type of international relations,” Xi told leaders at the opening ceremony on Wednesday.

New commitments, old problems

Held every three years, FOCAC dates back to 2000. This year, leaders including the recently re-elected president of South Africa, Cyril Ramaphosa, Kenya’s William Ruto and Nigeria’s Bola Tinubu made the trip to Beijing, where Xi promised to “deepen cooperation with Africa in industry, agriculture, infrastructure, trade and investment”.

Without offering specifics, Xi said that this year’s funding would support 30 new infrastructure projects to improve trade links, but refused any commitment on offering debt relief to countries already struggling with repayments for past projects.

The continent already has an annual infrastructure funding deficit estimated at $100bn, but still needs improved transport links to realise its plan for a pan-African trade bloc (AfCFTA).

While the $50bn-promise is more than 2021’s total spend pledge, it is less than the sums offered in 2015 and 2018 at the height of China’s Belt and Road Initiative (BRI).

Green progress?

Amid concerns about China’s own environmental record, as the world’s largest coal-powered nation, the summit also produced 30 clean energy project deals and promised greater cooperation in the nuclear sector.

Figures currently suggest the Asian nation is playing catch-up to ensure new projects are powered by renewable energy. Hydropower projects receive the most funding of China’s African infrastructure projects, but they still make up less than half of its overall energy spend on the continent, with oil projects a close second.

Trade imbalance

In addition to relief amid its infrastructure deficit, the Independent reports that African delegates were also seeking to shift the dial on the continent’s trade deficit.

Currently, China exports substantially more to its African partners than it imports from them. As well as calling for more support to industrialise and move further up the value chain, delegates made a case to export more of their agricultural products to China.

Ahead of this year’s forum, the South China Morning Post noted that this process is already ongoing, with new deals for South Africa to export avocados and Tanzania to export honey seeing their first shipments launch last month.

An expanded roster of Chinese-bound exports includes soybeans, pineapples, chillies, cashew nuts, sesame seeds and spices.

Critiques

Under the BRI, Chinese development banks have granted loans for infrastructure projects including railways, roads, ports and energy infrastructure.

This dynamic has been the subject of international criticism, with many countries in the West accusing China of allowing African nations to take on more debt that they can reasonably finance. When loan repayments can no longer be made, they claim China then requisitions the infrastructure, in addition to securing greater leverage over indebted countries.

There’s also been on-the-ground criticism of the projects, with an emphasis on hiring Chinese contractors to carry out the work and a disregard for local people’s welfare. Al Jazeera reports that, for Uganda, this year’s FOCAC took place against the backdrop of protests against an oil pipeline project, which drew local ire for displacing thousands of residents and causing environmental damage to water sources and surrounding wetland.

Geopolitical tensions

However, commentators have suggested other motivations for these criticisms, with Jana de Kluvier, an Institute of Security Studies (ISS) researcher telling Al Jazeera:

“That narrative [of China exploiting Africa] makes sense for [Western countries] because of their declining influence in Africa.

“It skips over a lot of the nuance that’s in the very multifaceted relationship.”

Ramaphosa also denied claims around Chinese motivation for the investments on second day of the forum, telling reporters:

“I don't necessarily buy the notion that when China [invests], it is with an intention of, in the end, ensuring that those countries end up in a debt trap or in a debt crisis.”

Xi has suggested China offers more favourable partnerships to African nations than the West. At a celebration for the tenth anniversary of BRI, he told assembled allies that “ideological confrontation, geopolitical rivalry and bloc politics are not a choice for us”, in what was perceived as thinly veiled criticism of the US.