by the editorial team
Edited by Harrison Gu (’24)
A Bridgehead of Chinese Influence
As a major revisionist geopolitical player, China has committed to investing over US$1 trillion outside of its borders in global infrastructure projects. The program, which has 139 member countries, has an impact on about two thirds of the world’s population. China’s Belt and Road Initiative (BRI), dubbed the “New Silk Road,” is an international development initiative that encourages the construction of infrastructure, primarily in developing countries, to enable the growth of interconnected trade networks. One of its main beneficiaries is now Africa. China seek to foster relationships with African countries and promote economic progress by funding infrastructure. This will help to incorporate the once unconnected continent into the global economy. Meanwhile, competing powers are also investing in Africa as a counterbalance to China’s expanding influence there, sparking a volatile geopolitical game with Africa caught in the crossfire.
Africa has lagged behind in recent decades despite growing investment in Asia and South America. International investors have always been put off by Africa’s poor infrastructure and high cost of doing business. Africa consequently concentrated on regional integration through encouraging economic development by linking its regional markets. However, sub-Saharan Africa’s regional trade is still hampered by inadequate infrastructure. In fact, just 20% of African trade was accounted for by it in 2016. Africa is therefore in a difficult situation. To entice international investment, it urgently needs roads, ports, and trains, but it lacks the funding to develop the essential infrastructure.
By funding infrastructure projects that will improve the continent’s global connectivity and connect it to the bigger global market, China’s BRI aims to rescue Africa from its plight. With China as Africa’s largest trading partner, strong economic ties are deeply rooted in Sino- African relations. In Africa, 40 percent of the Chinese loans pay for power generation and transmission, while 30 percent goes to revamping Africa’s obsolete transport infrastructure. In total, 39 African nations are among China’s BRI partners. However, its infrastructure projects are viewed as strategic. At least three African countries now count China as its primary creditor, and the country has funded the building of ports all throughout the continent. China also invested in a military station in Djibouti. These investments have been seen as carefully planned actions intended to maintain China’s economic hegemony, which may subsequently be used to boost Chinese political, military, and economic dominance.
“No Strings Attached”
Additionally, the BRI gives China access to the raw commodities needed to support its own economy. Under the pretense of goodwill, the BRI has increased China’s soft power in the area. China’s peaceful integration of the economies of Africa into its trading network stands in contrast to its imperialist past. However, China’s investment methods have come under scrutiny and are frequently criticized as being exploitative.
The BRI infrastructure projects are financed by loans rather than foreign direct investments (FDI). China has come under fire for negotiating contracts that invariably leave African nations heavily indebted. The debt financing provisions of the loans have been criticized for lacking transparency and for setting up debt traps. For instance, Kenya owes China 72% of its debt. More significantly, a US$2.3 billion loan was secured by the Mombasa Port. The loan’s conditions state that Kenya waived its sovereign immunity, putting the port at risk of seizure by China if Kenya fails to make payments. Similar unstable financial conditions exist in other African nations as well. For instance, China is responsible for paying half of Angola’s $21.5 billion in external debt as of 2017.
Counterbalancing Beijing’s Hegemonic Influence
The West and Japan are currently forming relationships in Africa through infrastructure investments in response to China’s ambition. Washington introduced the Build Back Better World Initiative (B3W), which promises the G7 to invest US$40 trillion in developing countries by 2035, particularly African nations, in an effort to sever this trading link. This effort is anticipated to be funded by private sector investments rather than loans from the government. The B3W contrasts with China’s investment strategy by reducing debt in African nations and promoting private-sector economic growth.
With the launch of the Global Gateway, a 300 billion euro ($337 billion) infrastructure plan, the European Union has also provided an alternative to China’s strategy for building out global infrastructure. Both governmental and private contributions are necessary to complete the project. In addition, the union claims that, in contrast to the BRI, its financing is not secretive or unfair to developing nations.
Given the increased rivalry for investments, China’s BRI must be seen as a significant potential for African nations. Despite the drawbacks, China’s involvement in Africa has sparked a new investment race among the top economic powers in the globe. As a result, Africa is drawing fresh international investment, which has greatly strengthened its negotiating position. Theoretically, it can diversify its funding sources and get loans with better terms. Africa must therefore weigh the benefits of taking advantage of China’s ongoing infrastructure investments and the continent’s stronger investment position against China’s potentially coercive geopolitical and economic strategies while considering the BRI.
