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Adept negotiations needed by Africa at FOCAC

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Adept negotiations needed by Africa at FOCAC

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The upcoming Forum on China Africa Co-operation (FOCAC) summit in South Africa, the sixth gathering since 2000 and only the second to be held at heads of state level, comes at a time of unprecedented Chinese activism across the globe.

Whether it is pursuing 'greenfield' investments in central Africa and South America, committing further resources to multilateral peacekeeping at the UN, expanding its economic diplomacy through the creation of new financial institutions or asserting its military presence in the South China Sea, Beijing’s strategic foreign policy is in the process of transforming international relations.

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President Xi’s 'Chinese dream' provides a framing narrative for this phase of China’s foreign engagement, with the dream’s twin goals of reclaiming national pride and achieving personal well-being.

In that context, it is important to review three key Chinese foreign and economic policy initiatives announced in the last two years and assess their significance for Focac and African interests.

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The Maritime Silk Road
The first initiative, the Maritime Silk Road, is part of an ambitious form of economic diplomacy called the 'one road-two belts', encompassing the expansion of land and sea-based development across Eurasia and the Indian Ocean to European markets, that would lay the basis for closer integration between China and the affected countries.

These 'Silk Roads' are founded on the same characteristics, namely: A belt of economic co-operation for China and the countries of the region; a belt of the free flow of investment and trade for China and the countries of the region; a belt of interconnecting infrastructure, including road, railroad, sea lanes and air links for China, and the countries of the region; and a belt for the free flow of people for China and the countries of the region. In promoting greater economic co-operation, the two initiatives also call for trade settlement in local currencies and more currency swop schemes.

In a more detailed plan issued by China in March 2015 the Maritime Silk Road was designed to encompass not only the Indian Ocean routes to Europe, but also the South China Sea to the South Pacific. Entitled 'Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road', the document sets out the principles, framework and co-operation priorities and mechanisms for its implementation. This 'manifesto' also emphasises that the initiative should be 'jointly built through consultation to meet the interests of all and efforts should be made to integrate the development strategies of the countries along the Belt and Road'.

In 2014 China announced a $40-billion (R577-billion) Silk Road Fund, while in April 2015 it announced a capital injection of some $62-billion from its foreign reserves into its policy banks (the China Development Bank, Export-Import Bank and the China Agricultural Bank) to support its one belt-two roads initiative. Chinese analysts have spoken about the initiative resting on the principles of open regionalism that would contribute to greater connectivity across sub-regions, thus fostering greater regional integration.

The Asian Infrastructure Investment Bank
A second major initiative is the establishment of the Asian Infrastructure Investment Bank (AIIB) in 2014. As the name suggests, the primary focus of this new financial institution, backed by an initial $50-billion, increasing to $100-billion in Chinese capital, is to support the building of transportation, power generation and port facilities across the Asia-Pacific region. It is widely viewed as a challenge to the Washington-led multilateral institutions like the World Bank and the Asian Development Bank, though Chinese officials tend to demur on that point. Notably, South Africa is among the 20 non-regional member countries.

The $5-billion allocation to the China-Africa Fund, which is part of the China Development Bank, is small by comparison to the Silk Fund and the AIIB.

Chinese peacekeeping contributions
A third major initiative is the expansion of Chinese involvement in multilateral peacekeeping. President Xi Jinping’s announcement in September this year of provisions for 8 000 more Chinese troops to participate in UN peacekeeping and the setting up of a $1-billion fund to support UN peace and development operations are clear indications of a growing commitment.

Furthermore, specific to Africa, Beijing will be providing $100-million to support the establishment of the long-awaited African Standby Force and the African Capacity for Immediate Response to Crisis (ACIRC), South Africa’s recent initiative within the AU.

Implications for China-Africa relations
The significance of these Chinese foreign policy initiatives for FOCAC and Africa is threefold.

First, the direction of trade and financing of major projects looks set to have a greater regional focus on the east coast and the Horn of Africa with Kenya, Tanzania and Ethiopia serving as Chinese development nodes. To date, the actual projects tied to China’s initiatives overwhelmingly involve infrastructure finance and construction, including the multi-million dollar rehabilitation of the East African railway linking the port city of Mombasa with Nairobi and eventually extending into Uganda.

Running in parallel is the expansion of port facilities at Dar es Salaam as well as the long-proposed oil pipeline and port construction between the northern port of Lamu in Kenya and South Sudan. In addition, China is funding the resuscitation of the port of Bagamoyo in Tanzania that is across from Zanzibar which, once completed, will dwarf Kenya’s Mombasa port.

Secondly, the security implications of the deepening Chinese economic concerns, already recognised at the FOCAC ministerial in 2012, are inspiring greater attention and resources from China.

The welcome support on offer will enhance the capacity of the AU and the UN to address the worrying proliferation of instability in parts of the continent. Concurrently, Chinese naval activism on the African littoral of the Indian Ocean, cemented through the establishment of basing facilities in Djibouti in March 2015, are indicative of their recognition that commercial expansion in the Indian Ocean and coastal Africa implies a need for strengthening its security provisions. Such security provisions may potentially extend to the Atlantic side of the continent given the rise in piracy around the Gulf of Guinea.

Lastly, the overall thrust of the Chinese initiatives reminds Africans of an 'inconvenient truth': that the strategic position of the continent in Beijing’s overall global calculus is limited compared to China’s immediate region. Africa represents a small portion of China’s international trade profile and, while it has been expanding in recent decades, Beijing’s economic interests in Asia and Europe as represented by the One Road-Two Belts initiative remain paramount, especially as the land belt across Eurasia is intended to significantly benefit China’s less developed inland regions.

As with president Jiang Zemin’s 'three represents', his contribution to the Chinese Communist Party’s doctrine in the early 2000s now long forgotten, FOCAC, which was initiated by him, may become overshadowed in attention by the new president’s focus on his vision of the One Road-Two Belts.

So while the rhetoric is bound to flow to the stratospheric at the FOCACsummit, this recognition should be borne in mind as Africans ponder the best way to leverage Chinese resources for their own development. Such opportunities may well lie in China’s move from export- oriented growth to a new model based on consumption and outward investment, but this will require the right policy frameworks and adept negotiations by African countries to realise them.


Written by Chris Alden, senior associate fellow and Elizabeth Sidiropoulos, CEO, South African Institute of International Affairs.

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