China’s Trade with Africa

China is constantly increasing its influence in the world’s economy by spreading its presence to almost every part of the world. Chinese goods fill the markets of many countries, and China’s large-scale, fast-growing, and worldwide interests raise disputes about the extent of its power (Shinn & Eisenman, 2012). China has set up long-lasting connections on every continent and with many significant and secondary associates (Shinn & Eisenman, 2012). The influence, force, acceleration, and range of China’s presence in Africa cannot be matched by any other country in Asia. The association between Africa and China has developed in several phases over a sixty-year period and has encompassed the principles of economics, ideology, politics, and protection (Shinn & Eisenman, 2012).

The reason I chose this topic is because it is gaining more and more interest every day not only on the part of China and Africa. Their relationship impacts global economic and commercial events, which makes the research on this issue crucial to an understanding of current world trends.

A Brief Historical Background of the Topic

In the current economic relationship between China and Africa, trade is the most significant element. However, commercial agreements between the two sides were not frequent in the past despite China’s urgent need for them. The greatest dilemma for researchers is that there is not enough information on this issue (Shinn & Eisenman, 2012). There are some accounts from the Chinese side that do not have any backing from the African side.

The trade relationship between China and Africa grew very close in the period between 2000 and 2010 (van Dijk, 2009; Shinn & Eisenman, 2012). China became the most significant contributor to the African economy. The United States is Africa’s most important commercial partner; however, China follows close behind, occupying second place in trading relationships (van Dijk, 2009). This development has ended the limitations faced by Africa in the arena of world trade, starting in the 1980s. While Africa’s impact on China’s market is moderate, it has a bigger stake in China’s external commerce than world trade. Chinese companies have a formidable and growing presence in Africa. Their investment approaches ten percent of all foreign contributions (van Dijk, 2009). There are over 800 Chinese companies in Africa, which is almost equal to the number of US companies in South Africa alone. Their dominant role is in the mining and oil areas, electronics, household devices, and fabric goods (van Dijk, 2009).

China’s Investments in Africa

One area of Chinese activity in Africa is represented by investments. There are several explanations for the significance of the current increase in Foreign Direct Investments (FDI). The first is the demand for Chinese FDI, which can help Africa to meet the Millennium Development Goals (Kragelund & van Dijk, 2009). These are the goals aimed at reducing poverty, adopted in 2000 by the world leaders (Millennium development goals, 2006). The second explanation is that Chinese FDI is lower in Africa than in other parts of the world. Another explanation is concerned with FDI being acknowledged as a secure economic point of supply. Next, FDI has so far been represented only in some parts of Africa. Additionally, Chinese FDI varies from other origins of FDI to the African continent. Finally, it may actually become a significant factor for the African economy when considered as a share of investments per year (Kragelund & van Dijk, 2009).

Causes and Consequences of China-Africa Trade Patterns

Beijing has become a central site of current anti-Chinese opposition stories in Africa due to China’s trade methods on the continent. In spite of the opinions that the trade between China and Africa is governed by liberal principles, one opinion says that a lot of factors have an impact on the China-Africa trade partnership (Eisenman, 2012). In the past decade, many research papers have been dedicated to finding out the reasons and outcomes of China-Africa trade methods. The scholars conclude that these methods involve one of the following trade theories: the theory of relative factor abundance, the theory of gravity trade, and the theory of political trade (Eisenman, 2012).

The theory of relative factor abundance is preferred by the majority of the economists. According to this theory, the arrangement of China-Africa trade is explained through the divergences in funding given to the employment, supplies, and investments. The gravity theory of trade argues that the major causes of the trade quantity are dictated by the amount of commerce and the distance between the countries. The differences between the expected approaches of trade relationships between China and Africa have provoked political disagreements in global trade. Political trade theorists believe that while it is challenging to follow the impact of the shared regime on commercial relationships, such system is vital for successful commerce (Eisenman, 2012).

The outcomes of the trade patterns between China and Africa include a growth in resource trade, the lessening of the impact of distance, the exclusion of Africans from labor-intensive regions, and the anti-Chinese opposition stories in Africa. The increase in resource trade has resulted in a stabilized commercial relationship between China and Africa when considering all the states together. However, on a state-by-state basis, the stability of commerce between China and retailers of supply favors the African country (Eisenman, 2012). With regard to the formerly crucial distance factor, Beijing’s policies have made it lose its significance. Therefore, due to China’s expanding shipping activity, the Chinese-African partnership has become more convenient. The third outcome of trade patterns is the exclusion of Africans from labor-intensive regions. This is concerned with China’s constructing of roads and railways in Africa, which makes it possible for Beijing to control the targets of exports and the points of delivery. Finally, the anti-Chinese opposition stories in Africa play a crucial role in the relationship between Africa and China. Chinese policies deprive the Africans of control of the industries, which provokes people to feel the threat of inequality in commercial relationships between Africa and China (Eisenman, 2012).

Benefits and Limitations of Chinese-African Trade Relations

As Africa is by far the poorest continent with a low tendency toward improvement, its relations with different countries are necessary. However, these relationships do not bring purely positive outcomes, presenting not only gains but also losses (Ademola, Bankole, & Adewuyi, 2009). The possible advantages and disadvantages for Africa are classified into four groups. The two major gains are connected with Africa’s export possibilities. For one thing, African states exporting products to China can make a profit because African exports are growing in China. Such a state of affairs encourages general economic progress. For another thing, African countries importing Chinese goods may win due to lowered prices. Thus, the advantage lies in less-expensive products (Ademola et al., 2009).

The main losses are also concerned with export-import affairs. In the first place, when Africa and China import the same goods, the African importer may lose the “import competition” to China (Ademola et al., 2009, p. 496). The second loss is caused by the analogous exported goods by China and Africa, leading to lowered export prices and a decline in market share for Africa (Ademola et al., 2009).

Africa’s Significance in the China-Africa Cooperation

While most analyses emphasize China’s dominant role in Chinese-African relations, Mohan and Lampert (2012) remark that Africa deserves recognition for its attempts in the negotiations. They emphasize Africa’s growing agency and lessening of its dependence in recent years. The rise in Africa’s importance is connected with innovations at the international level in response to the increasing need for natural resources and minerals (Mohan & Lampert, 2012). The lack of these resources in China and their abundance in Africa allowed the latter to dictate some rules in the relationship between the two.

However, apart from economic needs, people are trying to satisfy their social needs. For instance, citizens of many African countries have applied to China with the aim of finding a beneficial environment for personal and commercial progress (Mohan & Lampert, 2012). At this interpersonal level, African people emphasize the significance of local commerce and argue that the presence of African traders in China has been more influential than the presence of Chinese traders in Africa. This opinion is confirmed by the Chinese goods dealers who agree that their greatest challenge is presented by the African merchants and not by other Chinese traders (Mohan & Lampert, 2012).

Expectations for China-Africa Relations in the New Century

While Africa’s prospects in connection with China are described as optimistic, Xing and Shaw (2016) argue that such descriptions take place in “descriptive and uncritical” sources (p. 9). Among the most widely discussed issues is Chinese aid to Africa. The critics remark that China’s aid does not correspond to the established system of international assistance. In spite of negative opinions, China has created the basis for long-lasting impact in Africa (Xing & Shaw, 2016). While most cooperation is regulated at the government level, China has found a number of ways to alter the system and accommodate it to its own needs. Therefore, China’s private economic engagement in Africa is spreading.

Such trends enable migration from China and other countries to Africa, which may cause social difficulties on the continent. The critics also apprehend adverse outcomes for cultural life in Africa as a result of China’s influence (Xing & Shaw, 2016).

The Implications of China’s Influence in Africa for the United States

China’s impact on Africa through its ample assistance in the areas of armed forces, finance, and diplomacy is putting US targets in Africa under threat. While Beijing considers Africa a district of important strategic and economic attraction, the United States sees China’s influence as a distraction from the US concept of developing democratic relations with Africa (Brookes & Shin, 2006). As long as China supports tyrannical African policies, America will remain unable to implement its vision of democracy and respect for human rights in Africa. The United States is worried about disrespect for freedoms in Africa and China’s support of this disrespect (Brookes & Shin, 2006).

Due to the fast expansion of the Chinese economy in recent years, the country has had to meet an oppressive need for more resources. China’s demand for energy along with its decreasing petroleum supply has made Beijing look for energy sources outside the country. Thus, Africa has become its target for obtaining the necessary resources. In order to gain a stable relationship with Africa, China has employed visits of high authorities, vast investments, and the policy of non-intrusion in Africa’s domestic affairs (Brookes & Shin, 2006). China has used its construction and engineering industries to develop the natural resources in many African countries. These transactions are aimed at expanding its oil imports from the Middle East.

Apart from desiring to profit from Africa’s resources, China’s destructive policies involve weapon sales. African dictators buy military equipment from China and further use it to oppress their people who are fighting for their rights (Brookes & Shin, 2006). As such politics of China toward Africa undermine US plans for the region, America should resort to some influential strategies that would ease China’s impact and support democracy in Africa. Thus, the United States should expand its diplomatic ties with Africa, stimulate human rights support in the region, develop economic and trade connections with African countries, organize the further search for resources on the continent, and look for new international allies (Brookes & Shin, 2006).

Conclusion

The history of trade relations between China and Africa may be not very long, but it is a rich one. In the past decade, with China’s help, Africa has strengthened its position in the global market and developed prospects for successful future projects.

On the downside, China’s adverse activity in Africa is noted. Its support of dictatorships and the weapons trade is considered to be the driving force of Africa’s deteriorating position in the world.

In order to maintain successful cooperation between Africa and China, intervention programs should be developed to control and regulate the relationships and lead them in a solely positive direction.

References

Ademola, O. T., Bankole, S., & Adewuyi, O. (2009) China-Africa trade relations: insights from AERC scoping studies. European Journal of Development Research, 21(4), 485-505.

Brookes, P., & Shin, J. H. (2006). China’s influence in Africa: Implications for the United States. Backgrounder, 1916, 109.

Eisenman, J. (2012). China-Africa trade patterns: causes and consequences. Journal of Contemporary China, 21(77), 793-810.

Kragelund, P., & van Dijk, M. P. (2009). China’s investments in Africa. In M. P. van Dijk (Ed.), The new presence of China in Africa (pp. 83-100). Amsterdam, Netherlands: Amsterdam University Press.

Millennium development goals (2006). Web.

Mohan, G., & Lampert, B. (2012). Negotiating China: Reinserting African agency into China-Africa relations. African Affairs, 112(446), 92-110.

Shinn, D. H., & Eisenman, J. (2012). China and Africa: A century of engagement. Philadelphia, PA: University of Pennsylvania Press.

Van Dijk, M. P. (2009). Introduction: Objectives of and instruments for China’s new presence in Africa. In M. P. van Dijk (Ed.), The new presence of China in Africa (pp. 9-30). Amsterdam, Netherlands: Amsterdam University Press.

Xing, L., & Shaw, T. M. (2016). From “politics in command” to “economics in command”: China-Africa relations in the Era of great transformations. In L. Xing & A. O. Farah (Eds.), China-Africa relations in an era of great transformations (pp. 1-22). New York, NY: Routledge.