China's $50 billion pledge to Africa: A sign of deeper cooperation and economic growth

China this week hosted the 9th Forum on China to Africa Cooperation, a three-day summit that convened African leaders in Beijing and of course all in efforts to strengthen ties with the continent. Joining me now to discuss this in more detail is Linda Calabrese who is Senior Research Fellow and China-Africa Expert and we're over at ODI. Thank you so much for your time Linda, we truly appreciate it. Now it has been three days of discussions around policy and cooperation agreements, billions of dollars have been pledged and promises have been made but just to kick us off what are some of the key summit highlights or announcements that stood out for you? Of course so the first and most important thing that everyone looked at you know from the summit announcements were the financial pledges where China pledged around over 50 billion dollars towards projects in Africa. Now this was split into different categories but it was more than pledged for the previous FOCAC summit in 2021 signaling that not only China's economy is doing better compared to the COVID years but also that it has a renewed commitment towards Africa. Now this is not as much as it was pledged in previous years in 2015-2018 but it still shows a sign of strengthening and a sign of deeper cooperation between the two parties. I was particularly interested to see a lot of announcements on trade and on industrial cooperation because this will really be helpful to foster Africa's economic growth and therefore potentially you know less dependence on other partners including China in the future years. Yeah and we'll get into some of the announcements that were made on trade but I want us to talk a little bit about that 50 billion dollars pledge announcement that was made by the president of China Xi Jinping yesterday. The debate broadly has been whether this is to further debt for further in debt entreatment for Africa and I will quote unquote or do you think is a genuine investment in areas crucial for the continent's development? Part of it is aimed at investment specifically so it doesn't have to do with infrastructure for example it doesn't have to do with other with other areas or maybe it's actually investment into infrastructure but it's not linked to the debt and to the issues that have been existing in the China-Africa relations. I think the part that is linked to in particular developing Chinese investment in Africa into the transport and logistic sectors into specific value chains such as pharmaceuticals or agro processing that will definitely be helpful and will generate economic growth that of course will contribute to partly repay that but also to serve other purposes for African countries. So overall I think the pledge is not just to do with that it has a broader purpose that will be helpful in the in contributing to economic growth and transformation on the continent. And just quite notably Linda you know China's funding for infrastructure development in Africa has decreased significantly over the years most notably since 2001 and I'm talking about Xi Jinping's flagship Belt and Road Initiative. It is great however to hear that you know these investments have picked up but just given the current economic climate that we find ourselves in what is China's strategy here? I think the strategy overall is to move a little bit away or at least what we have seen is a decline in official lending so government to government lending. What we see is more I think commercial or lending or investment into the African infrastructure sector. So the end game in a way still to support infrastructure is still to allow Chinese companies to operate in the African construction sector. That's actually a very big market for them but at the same time without creating and incurring in that sort of issues related to debt and debt repayment that we've seen in the past few years. And it's a shift in the risk in a way. Yeah yeah and Linda comments have been made this week that China's three-day charm strategy to expand its influence on the African continent and you know sort of position itself as a leader of the global south and it's interesting that this is happening amid a silent face-off with the West. So what does the West do in response to China's strategy on Africa which we are seeing unfolding right now? I think China's strategy with Africa is very clever. It's really showing African leaders that China is interested in them, that China is interested in African countries. They've given a wonderful red carpet treatment to over 50 African leaders in the past few days. It really cements the relationship between China and Africa. I think what the West should do is actually not try to compete by bringing China down but rather actually have a better offer for African countries. So if countries in the West believe that China is not offering the right terms for infrastructure development for example, they could think of other ways of doing that or they could think of supporting African countries in devising their own infrastructure strategies. I think it's a matter of having a genuine competition not by putting China down but by helping African countries more. Just in terms of where this money is being allocated, which sectors do you think China should look into? I'm also just talking about in terms of funding Africa's continental trade pact. I do think that the African continental free trade area is a big economic and political project. In fact it's probably the biggest economic and political pan-African project at the moment and it's very exciting. It's something that African leaders have been working towards. Because that is so important I think there should be a more explicit link between China's actions but also the West's action to support this project. This will create an intra-African trade area, so an intra-African market that doesn't necessarily benefit China or the West. It benefits African countries more but because it's so key and so important to demonstrate real partnership and real solidarity that should really be the direction of the help and the support. I want to go back to the point that you made on trade. African leaders were making comments that they want to rebalance the trade ties between China and Africa just given the fact that it seemed as though we were exporting a lot to China or rather China was exporting a lot to us and quite not the opposite. What do you make or what strategy should then be employed to sort of rebalance these trade ties? So this is definitely something that's very dear to the heart of African leaders. President Ramaphosa as soon as he landed in Beijing made remarks on the trade balance and made remarks that South Africa for example wants to export more to China. As a person working on trade I don't necessarily believe that you need to achieve zero trade balance with all your partners. I don't believe that Africa needs to export as much to China as it imports from China. What I think is that African countries need to export more to all of their partners. So if they import a bit more from China to export more to the west or to other African countries or to the gulf for example that's also a good outcome. So the way I see it is African countries should use whatever support they get from China, investment, infrastructure, ports, roads, railways to produce more and to export more to all sorts of partners and that's why I think the African country is so crucial because it helps them export within Africa. All right well Linda thank you so much for your time. We'll leave our conversation there for now and that was Linda Calabrese who is Senior Research Fellow and China Africa expert over at OD.

Joining CNBC Africa to discuss this is more detail is Linda Calabrese, Senior Research Fellow and China-Africa Expert, ODI. 

China-Africa trade & investment relations: A shifting landscape

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China-Africa trade & investment relations: A shifting landscape

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