Being the largest economic power in the world, China has been investing everywhere and recently Africa has become the biggest investment zone despite knowing potential risks. Chinese investment in the African region, as well as other developing nations, has become an aggressive economic policy for the last decade. And this raises a question, Is China behind the direct return of investment or the geopolitical control over the African region?
Africa remains an untouched jewel for centuries despite suffering from several colonial powers including British, German, French, and Portuguese. Centuries after centuries, Colonialists have ruled African regions for its reaches and geopolitical influence in the name of civilization, exploration, or development. Africa has also remained one of the most favorite political playgrounds for American and European politics. In a similar fashion, an aggressive infrastructural financing activity raised a question against China if this is awake of a new face of neocolonialism.
What is the primary motivation of the aggressive FDI inflow from China to Africa?
The primary motivations behind the Chinese investment are to secure a strong base for economic control, geopolitical influence, and control over the natural resources to fuel Chinese national growth. To put this entire scenario into perspective, China is heading toward a neocolonialist vision in Africa.
Chinese Investment to African Region
Advancing from agrarian economy to business and industrial hub requires a massive amount of investment inflow when it comes to underdeveloped nations. Likewise, African nations are moving forward with the right strategy and attracting foreign investors and governments to invest in their developmental projects. Until 2008, the Chinese investment was increasing at a very steady rate and for the last decade, it has been aggressively increasing. The FDI inflow from China to African nations has increased three-fold in the last decade.
Currently, Africa is one of the biggest investment zones for China. In 2018, China announced a US$60 billion investment in the region to develop various industries. In September 2018, The Forum on China-Africa Cooperation (FOCAC) opened up the gate for China to invest in Africa. The Chinese president Xi expressed in that very forum about the new investment policy. According to Brookings Institute, from the total investment, US$20 billion will be given in the credit line. He also assured that $15 billion will be invested as grants, interest-free loans & concessional loans. Only US$10 billion will be investment financing. From 2000 to 2015, the Chinese Government and private organizations have invested over $94 billion dollars in various parts of Africa.
Similar to the previous British, French, and Portuguese colonialists, Nigeria is one of the largest investment zones for China. Nigeria presently inherits a railway that is coming from the previous colonizer Britain. Now China is investing its biggest amount to several rail line projects including Lagos to Kano and Lagos to Calabar. They are not just the investor rather Chinese firms are handling all the construction works.
As a matter of fact, Nigeria is not the only country where China is investing to build a railway. Kenya, Ethiopia, and Zambia are some of the other nations to be facilitated by the Chinese government. The Chinese Export-Import Bank provided $475 million for the Nigerian railway alone. According to Brookings report, transportation and energy are the two biggest sectors for Chinese investment. The entire investment is diversified in several sectors and 33% of the total investment is in transportation and another 33% is in the energy sector.
Besides, the energy and transportation, China has shown desperate interested in the mining industry. Currently, China is controlling a vast segment of mining belts in the central South African region including Tanzania, Mozambique, and Zambia. Similarly, China remains highly active in many other parts of Africa to take over mining work including Congo, Guiana, Ethiopia, etc.
On the other hand, China is the biggest importer of African mines consisting of cobalt, Copper, Zinc, Manganese, Gold, and Chromium. And currently, more than 25% of total mines are imported by China which is more than $100 billion dollars in valuation.
On the dark side of this investment, Zambia and Guiana are among the sufferers of the “Chinese debt trap” and Kenya, Tanzania, and Nigeria are on the next line to fall into this popular economic trap. From the side of China, this investment is a big potential risk because these nations may not be able to clear the debt according to their financial condition. Yet it has the biggest opportunity when it comes to mining and political influence.
All these strategies and investment policies remind us of the time of colonialism in Africa. British and other colonialists built some infrastructure including rail lines. Today’s Chinese policy is even horrific because this is how a nation falls in the “Chinese debt trap”. In the form of financial investment and contribution to developmental work, China is getting into the nerve of Africa as a new-colonial power.
China as a Rising Neo-Colonial Power in Africa
Africa is a vast land with the most beautiful green landmass still untouched. Since most of the African region is underdeveloped, there is plenty of opportunities for business with limitless natural resources. Due to the potential business opportunities, Africa has become a great investment zone for rich nations including China. China is the largest investor has definitely seen something beyond business opportunities. And Africa is really beyond business opportunities.
Primarily, behind Chinese investing in the African Region, there is political motivation and that can only happen if they take control of the African economy. If we think particularly from the perspective of the transportation and energy sector, Africa is in the utmost need. On the other hand, China is shifting its apparel and textile industry to the African region to expand its global reach. It is apparent that east African nations have huge access to land for cultivating textile raw materials including cotton. There is a nice paradox, this cotton fact is a similar event to British indigo cultivation in the Indian subcontinent back in the 19th century. Therefore, whatever is China up to, they have a political motivation with a very clear objective of establishing a neocolonial agenda.
When the entire world was transforming its economy, Africa was far behind from the global map. Despite having 30% of world natural resources, the African economy remains unchanged for decades. Therefore, African nations become desperate to develop its infrastructure and economy. When China came, Africa got speed to change their fate. With the massive investment and mining guidelines, Africa has been changing its economy with massive development in transportation and energy.
As far as the Chinese Government is concerned, this opportunity was a game-changer for taking control of the steady economy of Africa. Economic control is the primary reason behind the investment and it triggered an unprecedented geopolitical influence in the region. Being one of the world’s largest political and economic power, China has been focusing on economic expansion.
It has already invested in many parts of Asia including Bangladesh and Vietnam. But Africa is a logical place for a significant expansion and to have a global presence. It is undoubtedly true that this economic expansion has put China into a powerful role of geopolitical influence in Africa and all over the world. From a political perspective, Africa is bound to agree with Chinese political decisions. Since Beijing has significant control over the African economy now, exploitation of African resources and laborers became a common issue. Now it is seen that Chinese and African laborers are working together but African laborers are often exploited as the British colonialist did.
Djibouti is recognized as the horn of Africa and China has built its first overseas military base which indicates another potential factor of neocolonial intention. The US has been a neocolonial power all over the world especially in the middle east. In a similar fashion, China is aggressively progressing with its new colonial agenda, and the debt trap is just a good facilitator for the Chinese government to keep things functioning.
In short, China is expanding its global reach and making possible economic takeover on African nations by investing in major developmental projects. Africa is definitely a great business opportunity but the geopolitical influence and reserved natural resources are the main focal point. As China is actively investing in African mega projects including railway, seaports, energy, and industrial development, this region is becoming more dependent on China. The first Chinese military base in Djibouti and all these investments along with the political influence and the control over the mining operations are strongly pointing toward Chinese neocolonial intention in Africa.