Two-way trade flows between China and African states grew to $200bn in 2012, making China Africa’s largest trading partner. During his visit, Premier Le Keqiang proposed to double this to $400bn by 2020, and to increase investment stocks to $100bn from the current $25bn. As well as pledging at least half of China’s future aid effort to Africa, Li promised to add a further $10bn to an existing line of financial credits of $20bn for 2012-2015 and to inject a further $2bn into the existing $3bn China Africa Fund, dedicated to enterprise investment in Africa.
Li also hinted at a new joint financing fund with the African Development Bank, as a platform for trilateral cooperation in Africa’s infrastructural development, including regional aviation and high-speed rail networks. A $2bn Africa Growing Together Fund with untied procurement, was subsequently announced at the African Development Bank annual meeting in Kigali.
Creating the African Dream?
But beyond the dramatic numbers, Premier Li pledged China’s active role in a sustainable and inclusive African economic transformation over the coming decades. Directly using the graphic terms of the draft AU Agenda 2063 he portrayed a diversified, urbanised and green Africa of 2bn people, with dynamic cities and a thriving cultural life, a key force in a multipolar world, joined up by regional air networks, expressways and high speed rail. And he announced a readiness to help the transfer of industries from a transforming China to a transforming Africa (PDF), as “both sides face the task of achieving modernization”.
The power of dreams is not the stuff of economic textbooks, but China is bringing a form of public entrepreneurship to Africa that is already making a very tangible impact. Much of the recent and planned infrastructure development on the continent –power, roads, railways, ports and mobile telephony - involves Chinese funding and construction input. A new expressway from Addis to Adama, and a new fast train from Abuja to Kaduna were two projects Li inaugurated on this trip.
Economic transformation has become new African development narrative, as demonstrated in several recent reports by the AU/UN Economic Commission for Africa, the African Development Bank and the African Centre for Economic Transformation (ACET) (PDF), all based around this theme. It is clear that the developmental states of Asia – China, South Korea, Japan and Malaysia – are increasingly seen in Africa as role models, as well as being sources of investment and initiative.
China and the African Union: The New EmbraceLi Keqiang’s visit was also an occasion to cement ties between Forum for China Africa Cooperation (FOCAC) and the AU. AU membership in FOCAC, and an ongoing strategic dialogue between China and the AU, are very recent developments.
Geopolitical and geo-economic linkages between the Chinese and African development trajectories are thus now positioned, by China, within the African Union’s own frameworks, and aligned with African objectives, which neutralises charges of neocolonialism from within Africa itself. China will help Africa’s structural transformation. The big question here is to what extent China’s experience and accomplishments can guide Africa’s integration ambitions, in a continent with fragmented political structures rather than a unitary state, and with even more vast spatial challenges and ethnic diversity compared to China.
A major investment by China in an inclusive African economic transformation also requires investment in effective states, and peace and security in Africa. China is already a significant supplier of UN peacekeepers to Africa, and participates in the G8++ process for enhanced coordination and collaboration within the AU Peace and Security Architecture.
Even as it reiterates its policy on non-interference in internal political affairs, its now large and growing investments indicate just how much China counts on the emergence of effective states in Africa. The new Chinese initiatives announced in Addis on regional connectivity, poverty reduction, ecological conservation, and on peace and security, all indicate the breadth of its approach and an expressed readiness to work with others in taking these agendas forward.
China as Africa’s Public Entrepreneur?
In sum, China is ready and able to think big and long-term on the African development agenda and to act more rapidly than most other actors, in a mode of public entrepreneurship.
At the same time, success requires convergence of agendas across the areas of responsible, inclusive governance, conflict resolution and peacebuilding, as well as coordination across multiple institutional frameworks. Japan, the EU, the US, the BRICS and the G7 in its Brussels communiqué are lining up to assist the African transformation and peace and security agendas. Le Keqiang has signaled to Africa and the world of China’s readiness to engage – and to be a leader – in this hugely important endeavour.
This blog was written by Richard Carey and Li Xiaoyun, with the assistance of Yunnan Chen. Li Xiaoyun and Richard Carey are members of the IDS Advisory Council for the Rising Powers in Development Programme. Professor Li is Dean of the College for Humanities and Development at the China Agricultural University and Chair of the China International Development Research Network (CIDRN). Richard Carey is Chair of the International Advisory Committee of the CIDRN and former Director for Development Cooperation at the OECD. Yunnan Chen is the Research Officer for the Rising Powers in International Development Programme.
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