China's Massive Investments In Africa

CHINA

No Return Policy

It’s no secret that China has sought to expand its influence in recent decades over the African continent by way of large-scale infrastructural and business investments.

Recent figures by cross-border investment monitor fDi Markets place Chinese foreign direct investment in Africa at over $25 billion in 2017 alone – a number that dwarfs US investment in Africa many times over for that same year.

But the shiny new buildings, railways and government buildings in Africa that have come to symbolize the strength of the Sino-African alliance come with risks not mentioned on the original price tag.

The French daily Le Monde recently reported that the African Union’s new Chinese-funded headquarters in Addis Ababa had one feature not laid out in the original blueprint: a backdoor into the African Union’s computer network that allowed China to spy on the institution for five years.

The BBC reported that the Chinese ambassador to the AU quickly rebuffed the claim. But that didn’t stop the African Union from debugging the institution and rebuilding cybersecurity programs from the ground up.

Such a violation of trust would have surely put a kink in most bilateral relationships – think of the scandal that ensued after it was suggested that the NSA had wiretapped phone calls involving German Chancellor Angela Merkel.

But just days after the Le Monde report was published, Ethiopia and China announced plans to strengthen their partnership, according to Chinese state news.

Ethiopia, one of the world’s poorest countries, has greatly benefited from Chinese largesse – Beijing has built entire neighborhoods in Addis Ababa, a $475-million light-rail system and the $200-million AU complex, the Los Angeles Times reported.

That’s not to mention other projects across Sudan, Nigeria and Kenya – where China recently finished another $4-billion railway.

Such investments are a strategic move for China, which once sought to win the hearts and minds of Africans through the construction of passion projects like stadiums, but now is seeking to cement a strategic geopolitical and economic position on a continent largely ignored by the West, the Financial Times reported.

It’s working: By 2014, trade between China and Africa had risen 20-fold to $220 billion compared to where it stood in 2000, and a 2016 Afrobarometer survey of 36 African nations found that 63 percent of Africans thought China’s influence was “somewhat” or “very positive.”

Influence isn’t just a one-way street, either, writes Quartz. More and more Chinese are setting up shop permanently on the African continent, while one can find African entrepreneurs running factories and other companies in China.

China sees Africa as a testing ground for its strategy of exporting authoritarian development models by way of large-scale investments – the exact opposite of Western efforts to spread liberal democratic capitalism, the Economist reported.

But Beijing still runs the risk of everything being for naught if its billions invested don’t produce economic gains, the Economist posits – and such expensive buys often don’t come with a return policy.