No strings attached

The China-Africa engagement has grown precisely because it addresses issues that are central to African hopes and aspirations

The upbeat tempo at the 2024 Summit of the Forum on China-Africa Cooperation held in Beijing from Sept 4 to 6 was a sign that both sides have shaken the shadow of the COVID-19 pandemic. They have resumed the task of modernization to improve the quality of life, in spite of some challenges.

For China, the challenges include continuing efforts to make domestic consumption the primary driver of the economy, breathing life into a still sluggish property sector, and expanding markets overseas in the face of trade tensions with Europe and North America.

For the 53 African countries, the economic downturn resulting from the pandemic, sharp rises in the cost of food arising from the Ukraine crisis, the ravages of extreme climate changes and crushing debt burdens weigh heavily on leaders.

Nevertheless, the FOCAC 2024 ministerial summit, the plenary sessions and bilateral meetings on the sidelines, arrived at agreements that have far-reaching implications for China-Africa engagement.

At FOCAC 2024, bilateral relations between China and all African countries having diplomatic ties with China were elevated to the level of strategic relations, and the overall characterization of China-Africa relations was elevated to an all-weather China-Africa community with a shared future for the new era. Clearly, all of them believe that Africa and China have a long-term partnership.

Under the banner of "small and beautiful", agreements were reached with various countries on a cluster of projects in "soft infrastructure". These include agriculture, education, health, technology and communications, sustainable energy, cultural exchange and media sharing. They also include the all-important trade, this time focusing on currency swaps and export agreements.

Turning to "hard infrastructure", the forum saw the signing of agreements with Kenya on rural roads, resumption of discussions on completing Kenya's Standard Gauge Railway, the rehabilitation of the Tazara railway in Tanzania and Zambia, airport construction in Chad, high-speed rail networks in Morocco, and the modernizing of airports and seaports in Sudan. All these agreements were months in preparation. They show the breadth of cooperation between China and African nations.

In the end, the 2024 FOCAC proposed the highest total investment in many years. In a 10-point initiative, China pledged nearly $50.7 billion in financing Africa, higher than the $40 billion in 2021 and close to the $60 billion in 2018. It includes $30 billion in credit lines, more than triple the credit amount from the previous conference in 2021,$10 billion for Chinese firms to invest in Africa, and about $10 billion through unspecified projects. This is a resounding approval of the partnership at a time of global tensions.

Besides a super charged resumption of the drive for modernization, FOCAC 2024 introduced three important changes.

First, in a departure from the past, FOCAC 2024 diversified cooperation beyond hard-infrastructure Belt and Road Initiative projects. It prioritized "software for development" as envisaged in the Global Development Initiative, which was launched in 2021.

In practice that means focusing on "small and beautiful" projects. For the next three years, the China-Africa engagement will roll out projects on food security ($140 million), defense ($140 million), green energy (30 projects), 30 joint laboratories on satellite and space technology, 30 interconnectivity projects, 25 research centers, 20"digitization" projects, and 20 health projects. It will also send 500 agricultural experts and 2,000 medical staff members to Africa, train 6,000 military personnel and 1,000 law enforcement officers as well as 1,000 government officials.

After more than 20 years of FOCAC, it is time to get down to the details of modernization. Seen against the backdrop of upgrading relations, this is an important step in the evolution of the engagement.

China did not offer debt relief or restructuring, as some African leaders had hoped. But in the second important change China removed tariffs on all goods from the 34 least developed African countries, and signed bilateral agreements with 19 countries to make it easier to export various products to China by the end of 2023. This might chip away at, but not resolve, the imbalance in trade, a long-standing challenge to both sides.

In the third and perhaps landmark change, for the first time China will disburse all its FOCAC funding using the renminbi instead of the US dollar. In the same vein, China signed currency swap agreements with Ethiopia and Mauritania. Some African countries have been expecting disbursements using the renminbi; others have been seeking currency swap agreements. Taken together, these are new openings. They will increase the options for financing development or trade.

Perhaps some of the African policymakers left FOCAC 2024 challenged by the scale of the work over the next three years. But all were highly appreciative of the strategy of "Joining Hands to Advance Modernization and Build a High-Level China-Africa Community with a Shared Future." African analysts will welcome the invigorated engagement with its sense of purpose and urgency, especially in light of the current challenges across the continent.

Therefore, one is hesitant to introduce a cautionary note.

The three-year work program which came out of FOCAC 2024 consists of "software for development" packaged in "small and beautiful" projects. However, "hard infrastructure" projects, the hardware of modernization, are crucial in creating modernity in the first place. Deficits in hardware are still the bottleneck in Africa's drive for modernization through industrialization. Hopefully, hard infrastructure projects will get more attention as soon as current challenges facing both lender and borrower have diminished, as they eventually will.

This cautionary note also has a corollary.

The China-Africa engagement has grown precisely because it addresses issues that are central to African hopes and aspirations, the root causes of low levels of modernization. These challenges have been self-evident for generations, but Africa lacked the resources needed to address them and others simply would not engage. It is China's focus on hard infrastructure which brought 53 African countries to FOCAC 2024, as it has since 2000.The hope is that the slight shift to "soft infrastructure" will not serve as a pretext for others to increase pressure on China to attach conditionalities to FOCAC projects. The absence of conditionalities is something of great value to many African policymakers.

In the meantime, both sides are warming up enthusiastically to implement their three-year work program.

The author is a former economist with the World Bank and an advisor for the Kenyan government. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.