China Africa Trade Relations continues to expand at a phenomenal pace. China continues to expand its economic relations with Africa and has already surpassed the US as its biggest trading partner. Eurasian Times analyses China Africa Trade Relations
In mid-December in Nairobi (Kenya), there was the first exhibition of China-Africa cooperation in the field of production capacity. According to the officials of the Embassy of the People’s Republic of China in Kenya, strengthening economic ties and boosting China Africa Trade relations meets the interests of both China and the developing countries of the African continent. African countries are now at a stage of development where they need investments, equipment, and technology, and everything is being provided to them by the Chinese.
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The exhibition showed that small and medium-sized businesses from China have enough opportunities for investment in the economy of East Africa. According to the head of the Chinese delegation and the president of China International Exhibition Center, many opportunities for expanding and strengthening the China Africa Trade cooperation will be initiated by the mega-project “One Belt, One Road” (OBOR).
“OBOR will create new jobs and opportunities,” stressed head of the Chinese delegation. “The project will help the continent achieve significant development and strengthen friendship between the Chinese and Africans.”
Nairobi chosen as the site of the first Sino-African exhibition is not accidental. Kenya is an example of the development of economic cooperation between China and Africa. The country has all the necessary facilities: a favorable geographical position, sound economic base and a satisfactory state of the judicial system which is vital for China Africa Trade Relations.
Last summer, the first train service was started which connected the internal provinces of Kenya with Mombasa. In addition to Kenya, the southernmost corner of the project, active participation has been allotted to Egypt. The benefits of OBOR should also be felt also by the East African countries: Ethiopia, Tanzania, Uganda, Djibouti, and Rwanda said the Chinese delegate. They will be connected with Kenya by a network of railways built on Chinese investments.
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The Chinese are like a hungry teenager who is growing rapidly and needs essential nutrients – raw materials and resources. During the search for nutrients (resources), Africa attracted the attention of Beijing. While Europe and the US see Africa as a source of instability and terrorism, China views Africa as a massive source for trade and investments. Afterall, Africa is the only place on the planet where minerals are freely available, said an expert on China-Africa relations.
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The African continent has 90% of the world’s cobalt reserves, 90% of platinum, 50% of gold, 98% of chrome, 64% of manganese, more than 30% of uranium. African forests are still the most virgin on the planet. In Africa, there are many diamond deposits, and there is more oil than in North America. Africa also holds 40% of the world’s hydroelectric reserves.
Africans share resources with China in exchange for profitable trade agreements, loans and investments. Cooperation with China helps African countries develop, while the Chinese policy of non-interference in the affairs of African states is a major plus.
“The Chinese have overrun everything,” says Trevor Ncube, a prominent Zimbabwean publisher. ” Yesterday, our masters were British, now they are replaced by the Chinese.”
It is also obvious that China has used Africa as a testing ground for its growing ambitions in the international arena through peacekeeping missions, building roads, schools or ports, loans, and investments, etc.
Most importantly, the Chinese economy needs huge amounts of energy. In the list of oil suppliers to China, Africa is second only to the Middle East. Beijing receives 1.4 million barrels of African oil per day which is about 22% of the import of “black gold”.
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Last year, Angola was the third largest oil supplier to the PRC and even pushed Saudi Arabia to the third position (Russia being the biggest supplier of oil to China). Among other major African suppliers is the Democratic Republic of the Congo (DRC), the Sudan and Nigeria.
China Africa Trade Relations have surpassed all expectations. From Libya and Zambia to Ghana and Mozambique, China has firmly established itself as a “voracious resource eater” and, it demands almost all the minerals, even ivories. The Chinese are cutting wood in Mozambique, mining copper in Zambia, looking for uranium in Zimbabwe, buying cobalt in Congo necessary for the production of batteries for electric vehicles.
They are laying roads in Angola and building telephone lines in rural areas of many African countries. Hospitals, schools, water pipelines, dams, railways, highways, airports, hotels, parliaments are all being built by the Chinese.
China surpassed the US in 2009 to became the largest trading partner of Africa. Bilateral trade agreements have been signed with more than 40 countries of the continent. In 2000, China Africa Trade amounted to $ 10 billion. By 2014, it had grown to $ 220 billion, according to the China-Africa Research Initiative (CARI)
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China adheres to a multilateral approach in its economic relations with Africa, says CARI experts. It is a major source of foreign direct investment (FDI) in the African continent. Beijing offers loans for development; invests in agriculture and develops free trade and economic cooperation zones in several countries, including Zambia, Ethiopia, and Nigeria. As the main bank of the People’s Republic of China, People’s Bank of China, as well as such large financial institutions as China Development Bank, Export-Import Bank of China, China-Africa Development Fund, are engaged in the financing of Africa. Between 2000-2014, Chinese banks invested more than $ 86 billion in Africa. The main recipients of Chinese money in Africa were – Angola, Congo, Ethiopia, Kenya, and Sudan.