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CHINA-AFRICA RELATIONS

WHY IN NEWS?

  • Recently, the Chinese Minister of Foreign Affairs, Wang Yi, visited four African countries, Egypt, Tunisia, Togo and the Ivory Coast.

ABOUT CHINA-AFRICA RELATIONS:

  • Africa has been important to China’s foreign policy since the end of the Chinese civil war in 1947.
  • Several African liberation movements during the Cold War were supported by China.
  • In 1971, the votes of African countries were instrumental in winning the PRC control of China’s seat in the UN General Assembly and Security Council.
  • In the recent years, China’s main focus in Africa was to eliminating all remaining recognition for Taiwan’s government.
  • Gradually Burkina Faso, Malawi, Liberia, Senegal and others all switched their recognition from Taiwan to the PRC.
  • Eswatini is the only country in Africa, still to recognize Taiwan’s government in 2023.
  • In 1999 China came up with ‘Going Out’ strategy, which encouraged Chinese companies to invest beyond China.
  • This strategy was a clear indication of China’s growing economic might and created a new wave of Chinese engagement in Africa.
  • The strategy was also an important source of employment for Chinese citizens working on new infrastructure projects.

IMPORTANCE OF THIS VISIT:

  • The major agenda of this visit was to implement the outcomes of the China-Africa Leaders Dialogue held in August 2023 in Johannesburg, South Africa.
  • The dialogue included the execution of three initiatives, including support for Africa’s industrialisation, agricultural modernisation, and cooperation on talent development.
  • The Minister’s visit also sets a precedent for the ninth Forum on China-Africa Cooperation 2024 (FOCAC).

CHINA’S OBJECTIVES IN AFRICA:

  • As Africa supplies 90% of the world’s cobalt and platinum, and 75% of coltan, thus it is essential for Chinese electronics.
  • China also has the largest refineries in Africa for rare earths and minerals, which are important to its tech industry.
  • The dominance of China in the mining sector has made the U.S. dependable on China for key minerals from Africa.
  • Secondly, the African alliance and its geopolitical aspirations are of much importance to China’s foreign policy.
  • As in the UN General Assembly, Africa is the largest bloc and has the power to swing resolutions on contentious issues like the South China Sea.
  • Africa has been clear in the support of China in the international arena including its “One China” policy for Taiwan and Hong Kong.
  • Third, strengthening the Yuan (RMB) as China is encouraging Africa to trade in Chinese currency.
  • With low Chinese interest rates and the depreciation of African local currency, the RMB holds an opportunity as an alternative to the US dollar.
  • The RMB offers cross-border yuan-based “panda bonds,” by which foreign governments can issue funds from China at lower interest rates.
  • Interestingly, China’s debt restructuring of Zambia’s $4.1 billion loan has incentivised borrowers towards RMB.

  • Fourth, commercial opportunities for China.
  • As Africa imports largely from China for finished goods.
  • Africa’s young population and cheap labour force support Chinese exports globally and in Africa.

IMPORTANCE OF CHINA FOR AFRICA:

  • In return for natural resources, Africa receives investment, trade and development aid from China.

  • China has also become a significant source of FDI in African nations.
  • The idea of “Made in Africa” has become reality due to Chinese-built infrastructure and industrial parks, as they have also provided employment opportunities.
  • The Chinese support in advancing hybrid crops also helped Africa further its agricultural sector’s growth.
  • In Africa, cooperation with China is viewed with a high degree of mutual trust and as a ‘win-win partnership’.

WAY FORWARD:

  • For the best of China, it is important in protecting its reputation in Africa while reaching a reasonable financial settlement.
  • But, it will be difficult for China to agree to, having founded BRI deals based on strictly bilateral and often opaque agreements.
  • Thus, it is critical that African nations ask China and the West to cooperate on debt distress, ideally speaking with one voice through institutions such as the African Union (AU) and G20.
  • An AU joining the G20 could be an important step to creating equitable, cooperative solutions to debt distress between Africa, China and the West.

The post CHINA-AFRICA RELATIONS appeared first on Vajirao IAS.

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