what is china doing in Africa

China in Africa?

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China in Africa?

In this, we will discuss why is China in Africa? And what is the motive behind it?

Introduction

China has been a developing nation and it needs growth. Like every other country. 

But what do you do when you are already the most developing country in the world? What if your country is moving towards industrialized from Industrialisation?

Well, with China’s population and increasing consumption, it needs lots of natural resources like Cobalt, Gold, Iron, Oil to keep the machine of growth rolling.

See, China has lots of money. A lot of it. They are using it for their own advantage. To grow their political, military and economic influence in the world.

Let’s see,  what are we talking about?

What is China doing in Africa?

With China’s Belt and Road Initiative, they aim to connect the world for trade over Asia, Europe, and Africa. A project worth over $1 trillion. Yes, you read it right. 

Besides that, Pakistan, Sri Lanka, Myanmar among 80 other countries are also part of their Belt and Road Initiative. Which involves building infrastructure for connecting the world for trade. One of the mains is Africa. 

The quick growth of China in various sectors in the 1990s had demanded a huge need for oil and subsoil minerals, and Africa appeared to be an apt supply of this.

So,

China and Africa have been partnering on investments for approximately the last eleven years.

China has been investing heavily in the African continent to boost emerging markets there. Help them develop. 

For example- to name a few- China built a multi-billion-dollar railway project in Nairobi and Kenya connecting two cities.

Also, China provided funds to build a $526 million dam in Guinea. This would help them with consistent power shortages. Moreover, ensuring revenues by selling excess to neighbouring countries. 

Likewise, thousands of projects are going on in Africa funded entirely by China. 

China’s investments in Africa involves critical areas like utilities, telecommunications, port construction, transportation, etc.

China has loaned at least $132 billion from 2006 to 2017 in the African continent. No other country has ever made such huge transfers to Africa. 

Why is China doing this?

See, no country wants to see their business going to some other rival. In this case- India

China’s investments in the form of low or no-interest loans are no charity.

Many have estimated that these are just bold steps to take control of the unused natural resources in the African continent.

Africa holds around 30% of the world’s known mineral reserves. These include cobalt, uranium, diamonds, and gold, as well as significant oil and gas reserves which makes it a luring continent to make money. 

So by investing loads of money, China would use it for cheap labor by outsourcing its work, establish businesses there to generate huge amounts of profits, dominate the countries’ political system & territories, extract natural resources out of them. And of course, expand their military bases.

Interestingly, it will be harder to stop China. Following, these countries would then be indebted to China for its loans which are yet to be given back, trapped in ‘Debt Trap’. 

Above all this, China can dominate them and gain a vote from the African continent against recognizing Taiwan as a separate nation. That’s a long story in itself. 

Bottom Line

Chinese trade has undoubtedly contributed to economic growth in African markets. 

For outsourcing works, China is poised to do so as discussed in our previous posts, with rising per capita income in China, it has pulled millions of Chinese from poverty.  

Making them middle-class citizens led to a spike in labor costs and thus, making it less competitive. China does not want that.  

As pointed out by World Bank, Commodity exporters have benefited from high demand and associated price rises, and the competitiveness of Africa’s non-oil natural resources has increased over the past decade.

But all of it comes under a threat to the developed world. All these steps are not only hurting developed countries but also India who lose billions of dollars of business to China.

Conclusion

By doing all this, China does realize that countries primarily, the likes of the Republic of Congo, Ethiopia, Kenya, and Guinea among many others are unable to pay back these hefty amounts.

By putting a bet on underdeveloped countries of Africa, China is ensuring its constant growth by pulling out valuable natural resources. Finally, fueling China’s massive growth.

While China is at it, its political dominance would significantly expand its global presence and influence in the world.

The People Republic of China is going to use Africa as an advantage for a ticket to becoming World’s Super Power concerning biggies like The US, UK, and the European Union. That’s why China is in Africa.

But as usual China refutes the allegations. 

Let’s see how this pans out. 

Until next Thursday…..

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