China and Africa: Aid and Trade

Wen Jiabao, Premier of the People's Republic o...

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Together, China and Africa account for over one-third of the world’s total population. China’s economic engagement with Africa has in recent years become a highly reported issue, not least due to developments in aid relations.

The Forum on China-Africa Cooperation (FOCAC) outlines that:

China is the largest developing country in the world, and Africa is home to the largest number of developing countries. Promoting economic development and social progress is the common task China and Africa are facing.

During the 2009 opening ceremony of the FOCAC at the Egyptian Red Sea resort of Sharm el-Sheikh, Chinese Premier Wen Jiabao pledged $10 billion in concessional loans to African countries. Another marker in on-going relationship that has seen Africa’s exports to China grow by nearly 40% every year between 2001 and 2006 and become South Africa’s largest export market.

Opinions on this developing relationship are, of course, varied. Some of the stories coming out of Chinese and African relations have been incredibly negative. For example, the New York Times reported on China abetting in genocide in Darfur and funding a corrupt Zimbabwe government.

These stories may, however, be tarnishing the global opinion of an economic affiliation that has more to offer. And Deborah Brautigam argues just that in her 2010 publication, The Dragon’s Gift: The Real Story of China in Africa. Brautigam’s book sees China’s interest in Africa’s development as long term, with a genuine desire for mutually beneficial solutions through aid.

Richard Dowden takes a similar stance in his 2008 publication Africa: Altered States, Ordinary Miracles, writing that China perceives Africa as a business opportunity, unlike Britain and America, who see the continent as either helpless victim or security-threat. In a skeptical view of the benefits of the traditional aid system, he writes:

The aid industry has an interest in maintaining the image of Africans as hopeless victims of endless wars and persistent famines…However well intentioned their motives may once have been, aid agencies have helped create the single, distressing image of Africa. They and journalists feed off each other.

Yet Dowden also approaches China and African business with words of warning:

In places such as Guinea and Sudan, the Chinese may have to learn the hard way that secret deals with governments – especially coup leaders – will not protect their investments or benefit Africa’s development. The Chinese want stability and consistency, but they will find that African governments can rarely deliver these. You have to learn how to operate in Africa’s culture and hidden power structures…

The changing structure of aid across the globe is central to discussions at the 2011 Global Development Network’s 12th Annual Conference in Bogota, Colombia. Chinese and African relations, along with issues surrounding rising philanthropy and the fundamental structure of the traditional aid system will be brought to the fore during the plenary debate Development Aid: The Emerging New Landscape.

GDN and the African Economic Research Consortium (AERC) have recently completed extensive research into China’s relationship with Zimbabwe, in particular the military assistance, aid, loans and trade.

You can view videos and find out all of the latest news from this study through the AERC Biannual Research Workshop page on GDNet, the Global Development Network’s online research resource.

GDNet also houses a number of other articles that explore the financial relationship between China and Africa, such as:

The Chinese Influence in Africa: A global trend by Valerie Paone

China’s export-import bank and Africa: New lending, new challenges by the Centre for Global Development (CGDEV)

How does China’s growth affect poverty reduction in Asia, Africa and Latin America? by the Overseas Development Group at East Anglia University

Join us and follow this and all the other GDN Conference news online by subscribing to our newsletter or following #GDN2011



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