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FOCAC 6: This Time It’s Different

When Chinese president Xi Jinping arrives in Johannesburg to lead the upcoming Forum on China Africa Cooperation summit, he will be greeted as an old friend by his African counterparts. There will be smiles, the customary toasts to “win-win development” and a projection of confidence from both sides that all is well in China’s engagement strategy in Africa.
But all is not well.
Lurking behind the diplomatic niceties is real worry that Africa’s fate is now dangerously intertwined with that of China’s. While Beijing may capably manage its own economic transformation from an agrarian to manufacturing to a consumer-driven economy, Africa’s largely commodity-driven economies are far more vulnerable.
From Angola to Zambia to Uganda, the once promising resources-for-infrastructure deals are creating severe liquidity crises when these countries export natural resources China but do not receive payment in cash. The problem is compounded by the ongoing slump in global commodity prices, so even when clients do actually pay for their raw materials, there is little financial benefit.
Fear of China’s deepening engagement in Africa is also spreading across the continent’s manufacturing sector. With the Chinese economy slowing, PRC manufacturers are now looking farther afield for new markets, which presents a direct challenge for Africa’s budding industrial sector to compete with the “China Price.” If Chinese imports further undercut local prices that could lead to real problems in markets where unemployment is already a serious issue.
President Xi should be well-advised to take these economic concerns seriously. African leaders across the continent want to see China as a positive force for economic development but if their populations begin to link their own economic hardships to China, this could present a grave challenge to Beijing’s strategy on the continent. These are volatile economic times in Africa, China and around the world, and that calls for a far suppler Chinese policy that both acknowledges this new reality and responds as genuine partner whose engagement benefits ALL Africans.
This will not be an easy challenge which is why this year’s FOCAC will be different.

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