Introduction

China and Africa have long enjoyed a robust economic and trade relationship, which has seen significant expansion and diversification over recent years. According to Assistant Minister of Commerce Tang Wenhong, Sino-African economic and trade cooperation has reached unprecedented levels since the 2021 Forum on China-Africa Cooperation (FOCAC). This collaboration has delivered tangible benefits across various sectors, from trade and investment to health and green development.

At a news conference held on August 20, 2024, Tang highlighted the achievements under the nine cooperation programs announced during FOCAC’s 8th Ministerial Conference in Dakar, Senegal, three years ago. These programs cover a wide range of categories including medicine and health, poverty reduction, agricultural development, trade and investment promotion, digital innovation, and green development.

Trade and Investment: A Flourishing Partnership

China-Africa Trade Dynamics

China’s position as Africa’s largest trading partner has been firmly established for 15 consecutive years. In 2023, bilateral trade between China and Africa reached a remarkable $282.1 billion. This figure represents an almost 11% increase compared to 2021, underscoring the resilience and growth of Sino-African trade relations amidst global economic uncertainties.

This growth in trade is driven by a diversified range of products and services. Chinese imports from Africa include key commodities such as oil, minerals, and agricultural products, while exports to Africa encompass machinery, electronics, and consumer goods. This balanced trade relationship not only supports Africa’s development goals but also provides a stable market for Chinese businesses.

Investment Surge

China’s investment in Africa has also seen substantial growth. By the end of 2023, China’s direct investment stock in Africa had surpassed $40 billion, cementing its status as a major source of foreign investment on the continent. This influx of capital has been instrumental in driving various development projects and fostering economic growth across Africa.

Chinese investment has been particularly impactful in sectors such as infrastructure, manufacturing, and agriculture. These investments are not just limited to large-scale projects but also extend to small and medium-sized enterprises, contributing to job creation and economic diversification.

Job Creation

The positive impact of Chinese investment is evident in the job market. Over the past three years, Chinese companies have created more than 1.1 million local jobs across Africa. These employment opportunities span various industries, including agriculture, processing, manufacturing, and trade logistics. The creation of jobs not only supports local economies but also contributes to poverty reduction and socio-economic development.

Major Benefits of Sino-African Cooperation

Health and Medical Assistance

One of the most notable areas of Sino-African cooperation is in health and medical assistance. According to Liu Junfeng, deputy head of the China International Development Cooperation Agency, significant progress has been made in this area over the past three years. China has supported 25 medical and health projects, including the establishment of the headquarters for the Africa Centers for Disease Control and Prevention (Africa CDC) and the construction of a hospital in Bobo-Dioulasso, Burkina Faso.

In response to the COVID-19 pandemic, China supplied Africa with 240 million vaccine doses, along with batches of medicine and medical equipment. Additionally, China has dispatched medical teams to provide technical assistance and support in managing health crises.

Poverty Reduction and Agricultural Development

China’s commitment to poverty reduction and agricultural development in Africa is reflected in various initiatives aimed at enhancing food security and rural livelihoods. Programs focused on agricultural development have included support for modern farming techniques, infrastructure for irrigation, and capacity-building efforts for local farmers.

These initiatives are designed to increase agricultural productivity, reduce food insecurity, and improve the overall quality of life in rural areas. By investing in agriculture, China helps African countries achieve greater self-sufficiency and resilience against climate change and other external shocks.

Green Development and Digital Innovation

Sustainable development and digital innovation are key pillars of Sino-African cooperation. Chinese companies have implemented numerous clean energy projects across Africa, including investments in solar power and wind energy. This focus on green development aligns with global efforts to combat climate change and supports Africa’s transition to a more sustainable energy future.

In the realm of digital innovation, China has contributed to the development of digital infrastructure and technology in Africa. This includes investments in telecommunications, e-commerce platforms, and digital payment systems, which are essential for driving economic growth and enhancing connectivity across the continent.

Future Outlook: FOCAC 2024 Summit and Beyond

FOCAC 2024 Summit

The upcoming FOCAC 2024 Summit, scheduled to be held in Beijing from September 4 to 6, will provide a platform for further deepening China-Africa economic ties and exploring new avenues of cooperation. The summit will be attended by leaders and representatives from both sides, and will focus on several key themes, including industrial and supply chain cooperation, green development, and digital economy.

Institutional Opening-Up and Financial Cooperation

China plans to expand its institutional opening-up to Africa and deepen cooperation on industrial and supply chains. This approach aims to create a more integrated and collaborative economic environment, facilitating greater trade and investment flows between China and Africa.

Shen Xiang, director of the West Asia and Africa Department under the Ministry of Commerce, emphasized the importance of innovative financial cooperation models. China is committed to supporting African countries’ sustainable economic development through enhanced financial services and cooperation in emerging industries.

Entrepreneurial Collaboration

The FOCAC 2024 Summit will also feature a conference of Chinese and African entrepreneurs. This event will focus on discussing successful cooperation models and exploring new opportunities for collaboration. Topics will include industrial and supply chain cooperation, as well as the development of emerging industries.

The conference aims to foster greater collaboration between Chinese and African businesses, sharing best practices and successful experiences to drive mutual growth and development.

Conclusion

The Sino-African economic and trade relationship continues to thrive and evolve, delivering significant benefits to both China and Africa. The achievements over the past three years, particularly in the areas of trade, investment, health, and green development, underscore the strength and resilience of this partnership.

As China and Africa look to the future, the upcoming FOCAC 2024 Summit will play a crucial role in shaping the next phase of their economic and trade cooperation. By focusing on new cooperation models, deepening ties, and addressing shared challenges, China and Africa are poised to continue their journey towards greater mutual prosperity and development.

Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

3rd September, 2024