Context:
Recently, China hosted the ninth Forum on China-Africa Cooperation (FOCAC) in Beijing.
Key Highlights of the FOCAC Summit
- At the ninth Forum on China-Africa Cooperation (FOCAC), China pledged $51 billion in funding for African countries, including support for 30 infrastructure projects across the continent.
- This summit comes at a time of economic challenges for China and growing scrutiny over its big-ticket infrastructure investments in Africa.
- This year’s summit theme is “Joining Hands to Advance Modernization and Build a High-Level China-Africa Community with a Shared Future.”
- The major goal of this year’s summit is to establish a consensus and action plan for China-Africa cooperation over the next three years.
What is the FOCAC?
- The Forum on China-Africa Cooperation (FOCAC) was established in 2000 to formalise the strategic partnership between China and African nations.
- A summit is convened every three years, with the host alternating between China and an African member.
- FOCAC includes 53 African nations as members, representing almost the entire continent.
- Eswatini is the only African country not in FOCAC, due to its diplomatic ties with Taiwan, contrary to Beijing’s “One China” policy.
- The African Union Commission, responsible for promoting cooperation and economic integration among its member countries, is also a FOCAC member.
Significance of the 2024 Summit
- Unsustainable Chinese Investments: The summit comes at a time when concerns over loan defaults persist, with Zambia defaulting on a $3.5 billion loan in 2020 and Ghana defaulting on much of its $30 billion external debt in 2022.
- Shift in China’s Investment Strategy: China’s approach at FOCAC marks a strategic pivot from its previous emphasis on large infrastructure investments to more focused, sustainable projects.
- In recent years, Chinese lending has sharply declined, dropping from a peak of $28 billion in 2016 to $1 billion in 2022 and $4.6 billion in 2023.
- African Nations’ Stance: Despite massive debt to China, Kenya is seeking funding for multiple infrastructure projects. Another concern from countries like South Africa is the balance of trade being in China’s favour.
Evolution of China-Africa Relations
- China’s engagement with Africa began in the 1950s, supporting decolonization and establishing trade relations. By the 1970s, China gained recognition over Taiwan in global forums and completed its first major African infrastructure project, the Tanzania-Zambia railway, in 1976.
- Since the 1990s, China has become Africa’s largest bilateral trading partner, with trade reaching $282 billion in 2023, accounting for 20% of Africa’s exports and 16% of imports.
- Through the Belt and Road Initiative (BRI), China has invested over $120 billion in African infrastructure over the past decade.
- African nations often prefer Chinese funding due to fewer restrictions than IMF or World Bank loans. While China faces accusations of ‘debt trap diplomacy,’ some argue these defaults result from the borrowing countries’ mismanagement rather than China’s policies.