Africa Watch – Is China retreating?

25th September 2023

Chinese sovereign lending to Africa fell below $1 billion last year—the lowest level in nearly two decades, data showed on Tuesday, 19 September. The drop in lending is reflected in data from Boston University’s Global China Initiative. Africa has been a focus of President Xi Jinping’s ambitious Belt and Road Initiative (BRI), launched in 2013 to recreate the ancient Silk Road and extend China’s geopolitical and economic influence through a global infrastructure development push. Boston University’s Chinese Loans to Africa Database estimates that Chinese lenders provided $170 billion to Africa from 2000 to 2022. But lending has declined sharply since a 2016 peak.

 

China’s internal politics have led to a reassessment of the Belt and Road Initiative investments, with higher benchmarks set for loan approval. African countries have struggled to meet these new requirements. Many African governments have been unable to muster the discipline required to develop and pursue projects that are viable. Instead, political considerations and grandiose pretensions remain a prime driver of project developments.

As the global geopolitical climate continues to churn under the weight of significant realignments, Africa is again failing to position itself to be a net positive gainer. Furthermore, many analysts fail to see the BRI for what it actually is: a means to an end and not an end itself. Providing cheap loans and infrastructure development were tools for the establishment of an alternative political and economic system to what the US-led West has offered for nearly 40 years. As a result, the tap was always going to get dry, albeit not intentionally. China’s economy has been struggling since the coronavirus pandemic. It reopened slower than many of its rapidly developing peers, cratering the speed of its growth. Supply issues in manufacturing, a wobbly property market, falling birth rates, rising youth unemployment and shrinking civic freedoms complete a fraying domestic mosaic.

Internally, the political situation has remained charged since Xi Jinping started his third term at the end of last year. After the CPC convention, Xi Jinping purged his own loyalists in the security and foreign policy arena. African countries have been major recipients of the BRI, but Beijing may dumb down the initiative due to domestic political concerns. The addition of new members to the BRICS is a positive development for China, but the initiative remains a work in progress and is now in the West’s firing range. Ultimately, the BRI and BRICS offer an alternative to Western hegemony, but its success will depend on how China’s domestic political situation shakes out. Smart thinkers in Africa’s capitals had better start hedging their debts.