Despite controversy, China’s expanding presence in Africa aids continent’s growth

By Hu Weijia Source:Global Times Published: 2017/11/5 21:43:40

China's increasing presence in Africa has not been without controversy. Last week, West Africa's Cote d'Ivoire completed the installation of its largest hydropower station, which was financed by a low-interest loan from the Export-Import Bank of China and built by State-owned Sinohydro Corp.

Following years of political turmoil, business and economic growth is back in Cote d'Ivoire, straining power supplies. The new plant is expected to boost the country's electricity generation by more than 10 percent, allowing most villages with more than 500 residents to gain access to electricity.

Over 2015 to 2016, China led greenfield investment in Africa, accounting for 23.9 percent of total announced greenfield investment in the continent. In the past two decades, dramatic changes in the world economy have helped increase Africa's economic engagement with emerging countries. China and India, which were in the No.8 and No.9 places in 2000 in terms of total trade with Africa, are now the continent's largest and second-largest trading partners, according to the African Economic Outlook (AEO), the product of collaboration by the African Development Bank, the OECD Development Center and the UN Development Program.

China's economic engagement in Africa has stirred up much controversy in recent years among developed economies, which are Africa's traditional donors. Japanese Prime Minister Shinzo Abe has pledged to increase Japanese investment in a number of African states, which is seen by observers as a move to counter China's influence in Africa. But the AEO report showed Japan is no longer among the top 10 sources of greenfield investment in Africa.

The Nikkei Asian Review reported late last month that Japan will propose a dialogue with the US, India and Australia to promote free trade and defense cooperation across a stretch of ocean all the way to Africa, aiming at "counteracting China's aggressive maritime expansion under its Belt and Road initiative." US President Donald Trump's visit to Japan can be an opportunity to make Tokyo's idea a reality.

However, Tokyo's efforts to counter China are doomed to failure. The new power plant in Cote d'Ivoire is the latest example of how Chinese investment plays an increasingly important role in supporting the development of local economies and improving living standards.

It is impossible for a continent like Africa, which badly needs investment to fire up economic growth, to refuse to seize the development opportunities offered by China.

China is expected to continue stepping up investment in Africa, but it does not target any third party. Africa should not become a new economic battleground in the competition between China and Japan, or other countries like India.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON THE ECONOMY

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