Real Threats and Misplaced Fears at the Seventh Forum for China-Africa Cooperation

African leaders this week attended the Seventh Forum for China-Africa Cooperation (FOCAC) in Beijing, spurring another round of hand-wringing in Washington over the China-Africa relationship. Since 2000, FOCAC has been held every three years. It is the official summit between the Chinese President Xi Jinping and African counterparts, and it tends to produce major policy and financing announcements. Indeed, President Xi opened the summit by offering $60 billion in financing and said Chinese companies will be encouraged to invest no less than $10 billion over the next three years.ⁱ

The reaction from Washington insiders has been unsurprising. From U.S. competitiveness to Chinese debt, observers grumbled that “China is eating our lunch” and issued a call to arms to prevent further Chinese inroads in Sub-Saharan Africa. However, what China is doing in the region and how the United States should respond require a more nuanced analysis and policy response.

Q1: What big deals and financial assistance did China offer Sub-Saharan Africa?

A1: The summit showcased Africa’s role in China’s Belt and Road Initiative (BRI), which until now has been most associated with projects in Djibouti, Ethiopia, and Kenya. Most African leaders signaled their willingness to support the BRI. President George Weah of Liberia, for instance, last week told Chinese media that Liberia is ready to align his country’s national development strategy with the BRI.ⁱⁱ Other leaders have made similar commitments, even if the practical impact is more symbolic than substantive. President Xi trumpeted new additional loans and credits “without political strings,” and Chinese companies signed new investment deals. Most of this will go towards infrastructure projects.ⁱⁱⁱ For example, Ghana just signed eight cooperation agreements, including a $2 billion infrastructure deal with Sinohydro Corp. to improve its roads and develop railways in exchange for bauxite^iv

China also used FOCAC to undermine critics of its approach to Africa. For the past year, China has been accused of “debt trap” diplomacy in Sub-Saharan Africa. The International Monetary Fund and World Bank warned about rising debt during the annual spring meetings in Washington, D.C., and former U.S. secretary of state Rex Tillerson discussed it at almost every stop he made during his trip to the region earlier this year.^vvi In response, Beijing used FOCAC to write off some debt. It made a vague announcement that it will exempt certain countries from outstanding debt. China reportedly erased some of Zimbabwe’s debt in April and Botswana’s in August.^viiviii According to a Reuters report, Ethiopia and Zambia have requested debt restructuring, and Angola and the Republic of Congo allegedly have already done so.^ix

Q2: Are closer Chinese-African relations a threat to U.S. national security interests?

A2: Yes and no. Some of China’s activities in Sub-Saharan Africa threaten U.S. national security interests in the region, notably its growing military presence and digital footprint. The Chinese military base in Djibouti is just miles from a critical U.S. base, and there have already been reports of rising tension between the two powers. In May, the United States officially complained to China about using military grade laser to distract its pilots in 10 separate incidents; two pilots experienced minor eye injuries after being exposed to the laser beam.^x In the same month, AFRICOM commander Thomas Waldhauser told Congress that he was concerned about Chinese moves to assume control of Djibouti’s commercial port, warning that there could be restrictions on U.S. access. He added that he expected the Chinese to build more bases across the continent.^xi

China’s leading role in Africa’s telecommunication infrastructure poses a considerable counterintelligence threat. ZTE and Huawei have been active in the region for two decades, raising concerns about Chinese government access to cell phone networks and data. In May, the wireless carrier MTN, which serves 220 million people in Africa and the Middle East, said it was reviewing its operations “given our exposure to ZTE in our networks.”^xii The following month, U.S. senator Marco Rubio expressed concern about Chinese spying through Huawei and the ZTE presence in Africa and other regions.^xiii

However, much of Chinese infrastructure and development projects in Africa do not directly hurt U.S. interests. The region is in desperate need for roads, railways, and power. The World Bank in 2017 reported that Africa has some of the lowest road and rail densities in the world and lags behind other developing regions in all dimensions of infrastructure performance.^xiv If Sub-Saharan Africa can catch up to the median quality and quantity of infrastructure in the developing world, the World Bank estimates it will increase growth of GDP per capita by 1.7 percentage points.

The issue, then, is whether Chinese companies will construct durable roads, rails, and ports and whether they will avoid discriminatory practices towards U.S. firms. The quality of Chinese projects varies wildly, but a 2016 study from the China Africa Research Initiative (CARI) at the Johns Hopkins School of Advanced International Studies (SAIS) in Washington indicates that Chinese companies under World Bank contracts perform as well as OECD companies.^xv More important, Chinese firms cannot operate its road, rail, and sea links in a manner that disadvantages U.S. business. Infrastructure is neutral, but its operation is political. The problem is not that China builds railways in Africa, it is when a U.S. company cannot bid for the contract or cannot install its engines and connect branch lines to the main artery. Similarly, it is not a threat when China constructs a port, but it is a national security concern when the host country is compelled to turn over operations to Beijing like Sri Lanka did with its port in Hambantota.^xvi

Q3. What should the United States do next?

A3: The United States has a vital role in shaping Chinese-African relationships, but it must adopt a more strategic and realistic approach to its messaging and engagement. Instead of objecting to Beijing’s expanding footprint in Sub-Saharan Africa, Washington must accept that China has a long history and a secure future in the region. Even under the Trump administration’s “Great Power Competition” framework, there are better ways to advance U.S. interests than opprobrium and knee-jerk opposition. Below are three recommendations to manage China’s rise in Africa.

• Update the talking points. The United States scores few points by talking down to African counterparts about the risk of debt. First, these critiques tend to be outdated and, in some cases, factually wrong. A recent study from the Center for Global Development indicates that eight out of 68 countries worldwide are at risk of debt distress because of BRI projects; Djibouti, Ethiopia, and Kenya are the only African countries in this category. Second, U.S. chiding of African leaders who accept Chinese financing is often viewed as paternalistic. President Julius Maada Bio of Sierra Leone hit back at critics this week, saying “we are not fools in Africa.^xvii” It is also ineffective: until the United States reforms its own development finance tools, as proposed in the bipartisan draft Better Utilization of Investments Leading to Development Act (BUILD Act), there really are few alternatives to Chinese funding. It is well and good to talk about a “clear choice” between what the United States and China can offer, but it is another thing to have the resources and capacity to persuade African governments to stop borrowing from China.
• Focus on U.S. strategic advantages. The United States and its business community have natural advantages in Sub-Saharan Africa. These advantages do not include, however, building roads in rural parts of the continent. The United States should target sectors where the U.S. companies are best placed to compete with Chinese ones. A 2017 report by the Atlantic Council argues that U.S. firms are most apt to dominate in the service sector, financial realm, agribusiness, and renewable energy. In addition, there is a potential role for U.S. technology companies, as well as venture capital and social impact firms to play in Africa, especially if they adopt a royalty-based financing model.^xviii
• Invest in Soft Power. The United States has traditionally had an edge over China because of U.S. values and its people-to-people engagement. This important facet of U.S. influence, however, is at risk in Africa. According to a 2016 report by Afrobarometer, 63 percent of respondents in 36 African countries thought China’s economic and political influence in their country was positive. Indeed, in three of five African regions, China either matches or surpasses the United States in popularity as a development model. China is also issuing more scholarships to African students than the United States and the United Kingdom.^xix In the long term, the United States will lose its ability to persuade and attract if it neglects this dimension of national power. It is essential not only to continue the widely popular Young African Leaders Initiative (YALI) but also to ratchet up U.S. engagement with African leaders and publics. More importantly, the United States must repair its image as a beacon for democracy and economic opportunity if it wants to protect its interests and hold onto a leadership role on the continent.

Judd Devermont is the director of the Africa Program at the Center for Strategic and International Studies in Washington, D.C.

Critical Questions are produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
 
© 2018 by the Center for Strategic and International Studies. All rights reserved.

ⁱChristian Shepherd and Ben Blanchard, “China’s Xi offers another $60 bln to Africa, but says no to ‘vanity’ projects,” Reuters, September 3, 2018, https://af.reuters.com/article/topNews/idAFKCN1LJ0IO-OZATP.

ⁱⁱWilliam Q. Harmon, “Liberia to Align with China’s Belt and Road Initiatives,” Daily Observer, August 30, 2018, https://www.liberianobserver.com/news/liberia-to-align-with-chinas-bri/.

ⁱⁱⁱSarah Zheng, ”Beijing set to pledge billions more for Africa despite concerns over Chinese lending,” South China Morning Post, September 2, 2018, https://www.scmp.com/news/china/diplomacy/article/2162341/beijing-set-pledge-billions-more-africa-despite-concerns-over.

^ivPauline Bax and Moses Mozart Dzawu, ”Ghana Signs Accords with China Ahead of Summit in Beijing,” Bloomberg, September 2, 2018, https://www.bloomberg.com/news/articles/2018-09-02/ghana-signs-accords-with-china-ahead-of-summit-in-beijing.

^vLandry Signe, “The State of African Economies: Insights from the IMF and World Bank Spring Meetings,” Brookings, April 24, 2018. https://www.brookings.edu/blog/africa-in-focus/2018/04/24/the-state-of-african-economies-insights-from-the-imf-and-world-bank-spring-meetings/.

^viAbdi Latif Dahir and Yomi Kazeem, “China is pushing Africa into debt, says America’s top diplomat,” Quartz, March 7, 2018, https://qz.com/africa/1223412/china-pushes-africa-into-debt-says-trumps-top-diplomat-rex-tillerson/.

^viiCrecey Kuyedzwa, “China writes off Zim’s debt,” Fin24, April 5, 2018, https://www.fin24.com/Economy/china-writes-off-zims-debt-report-20180405.

^viii“China writes off loans,” Botswana Daily News, September 2, 2018, http://www.dailynews.gov.bw/news-details.php?nid=44959.

^ixJoe Bavier and Christian Shepherd, “Despite debt woes, Africa still sees China as best bet for financing,” Reuters, August 30, 2018, https://www.reuters.com/article/us-china-africa/despite-debt-woes-africa-still-sees-china-as-best-bet-for-financing-idUSKCN1LF2RM.

^xAbdi Latif Dahir, “US-China tensions are escalating in Africa as laser are pointed at US places over Djibouti,” Quartz, May 5, 2018, https://qz.com/africa/1271069/us-says-china-pointed-laser-at-pilots-over-djibouti-base/.

^xiJohn Vandiver, “AFRICOM Chief: Expect more Chinese bases in Africa,” Stars and Stripes, March 6, 2018, https://www.stripes.com/news/africom-chief-expect-more-chinese-bases-in-africa-1.515263.

^xiiRaymond Zhong, “Chinese Tech Giant on Brink of Collapse in New U.S. Cold War,” New York Times, May 9, 2018, https://www.nytimes.com/2018/05/09/technology/zte-china-us-trade-war.html.

^xiiiChris Bing, “In private briefings, U.S. government raises concerns over Huawei and ZTE,” Cyberscoop, June 22, 2018, https://www.cyberscoop.com/huawei-zte-marco-rubio-china-intelligence-concerns/.

^xivThe World Bank, “Africa Pulse: an analysis of issues shaping Africa’s economic future.” April 2017. http://documents.worldbank.org/curated/en/348741492463112162/pdf/114375-REVISED-4-18-PMWB-AfricasPulse-Sping2017-vol15-ENGLISH-FINAL-web.pdf.

^xvJamie Farrell, ”How do Chinese Contractors Perform in Africa? Evidence from World Bank Projects,” SAIS China-Africa Research Initiative Working Paper, February 2016, https://static1.squarespace.com/static/5652847de4b033f56d2bdc29/t/573c970bf8baf3591b05253f/1463588620386/Working+Paper_Jamie+Farrell.pdf.

^xviMaria Abi-Habib, ”How China Got Sri Lank to Cough Up a Port,” New York Times, June 25, 2018, https://www.nytimes.com/2018/06/25/world/asia/china-sri-lanka-port.html.

^xviiLi Rouhan, “Sierra Leonean president lauds China’s help in times of need,” Global Times, September 4, 2018, http://www.globaltimes.cn/content/1118108.shtml.

^xviiiAleksandra Gadzala, “Powering Inclusive Growth in Africa,” The Atlantic Council, April 2008, http://www.atlanticcouncil.org/images/Fintech_Issue_Brief_WEB.pdf.

^xixVictoria Breeze and Nathan Moore, ”China has overtaken the US and the UK as the top destination for anglophone Africans.” Quartz, June 30, 2017, https://qz.com/africa/1017926/china-has-overtaken-the-us-and-uk-as-the-top-destination-for-anglophone-african-students/.