China’s Role in Expanding Global Economic through Engagement with Africa

China Aids Africa
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China Aids Africa
China’s role in expanding global economic development has been very important over the years. Aid presents one of the crucial policy instruments for advancing Chinese engagement with Africa (Dreher et al., 2021). For instance, China’s tremendous economic presence in Africa has been growing, attracting heated debate regarding its involvement in development issues and its implications for Africa’s continent. For instance, China’s economic presence in Africa grew to approximately 3 billion in 2011 from 200 million in 2000. For the last five decades, the Chinese government has been involved in numerous African projects that entail healthcare, transport infrastructure, education, and factories in different sectors. A good percentage of the Chinese aid to Africa is channeled as development finance. However, the billions of dollars that China provides are subject to repayment in terms of long-term loans. For instance, 2009 to 2013 saw the Chinese government provide approximately 10 billion USD in concessional loans.
The Chinese President doubled the aid upon his visit to Africa in 2013 (Guillon & Mathonnat, 2020). The Chinese policy on financial aid focuses on the maximization of feasibility and flexibility of the various Chinese projects. This serves to meet local realities within the entire region of Africa as narrowed to specific countries. Despite the claim that the nature of the policy that china has towards Africa is pragmatic, the provided aid has served as an important policy instrument. China provides different types of foreign aid to Africa, including complete projects, human resource development, cooperation on medical assistance, volunteer programs, debt relief, and technical cooperation alongside other provisions like emergency humanitarian aid. The Chinese aid to Africa provides for various domains such as agriculture, transportation, energy, education, communication, and health (Guillon & Mathonnat, 2020).
Literature Review
Guillon and Mathonnat (2020) argue that, in the Cold War regime, China used aid as a key tool for gaining Africa’s diplomatic recognition, therefore, competing with the Western Countries in the quest for Africa’s support. The cultural revolution as support towards radical revolutionary ideology motivated China to provide enormous benefits of foreign aid to Africa despite China’s economic difficulties, for instance, the building of the Tanzania-Zambia Railway built in the 1970s. Such generous provision from China helped open the diplomatic doors of recognition from other 44 African countries. The commencement of such reforms opened up Africa to become one of the crucial economic partners for China (Liu & Luo, 2021).
Africa is rich in natural resources alongside market potential that requires proper infrastructure alongside finance development that stimulates economic growth. In such a perspective, the Chinese aid focuses on various aspects such as benefiting local countries that receive the assistance and China itself. For example, in most instances, China loans are covered by the natural resources from Africa. The Chinese financing relates to securing Africa’s natural resources. There is the aspect of providing low-interest loans to African nations that rely on minerals. The Chinese government has ensured that the countries with difficulties obtaining funding find it easy under certain conditions. The systematic Chinese approach to commodity loans has seen many countries benefiting despite being the brainchild of the leading Western banks. For instance, in 2006, Angola received 4 billion USD from the Chinese, which helped them complete their first oil-backed loans that helped Chinese oil companies explore various African oil blocks. The other example entails the Chinese Railway Group that applied the same model in securing mining rights from the Democratic Republic of Congo’s copper and cobalt mines through the use of the slogan “Infrastructure projects for resources” (Liu & Luo, 2021).
Chinese Infrastructure Development
China has played a key role in developing infrastructure can be seen through their state-owned lending programs to African countries. The loans help finance the various infrastructural investments such as road networks, railways, buildings, and power plants. However, providing substantial loans amidst economic challenges within various developing countries presents the challenge of the alternative actions in case of non-repayment of loans. Subsidized loans form an essential part of Chinese aid programs, making the volume of such loans exclusive in Chinese finance development (Liu & Tang, 2018). Policy approaches to the issues within Sub-Saharan Africa in the post-colonial period led to the adoption of various practices alongside policies that have driven the aspect of dividing the pre-existing economic cake instead of creating more opportunities. Such approaches resulted in economic stagnation of the whole region of sub-Saharan Africa. However, recent years have seen the majority of the sub-Saharan countries focusing on more growth-oriented strategies that help grow economic freedom. The processes have enhanced significant development in institutional structures with the potential of limiting economic freedom alongside reducing existing economic opportunities within Africa, especially those that exclude from various elite networks. The various roles played by the legal frameworks in shaping institutional structures alongside humanitarian outcomes within the region.
China entered into a Memorandum of Understanding (MOU) with African Union in 2015 to enhance infrastructural development in Africa. The agreement unfolded in various key Chinese investments activities across the African infrastructural projects. In this case, Chinese investment is viewed within the context of future economic growth and productivity across the African continent (Liu & Luo, 2021). The level of Chinese investment in infrastructure in the region presents a glimpse of larger engagement within other sectors of the economy. The aforementioned diverse sources of aid represent Chinese investment goals and objectives. The MOU is one of the key reflections of Chinese patterns of engagement in providing aid to Africa. China has continued to sponsor large-scale infrastructural projects across Africa. For instance, in 2012, the Chinese steered development projects worth $ 40 billion in construction, representing a 45 percent increase from the previous years. The Chinese construction companies built a modern tramway that opened up the Ethiopian market in 2015. This also includes various activities within the power sector influenced by the signing of the nuclear power deals in Kenya. It is important to note that infrastructure construction determines socio-economic development. From a broad perspective, the development of infrastructure provides a wide range of connectivity between cities and towns, enhancing trade and commerce.
The Chinese government has used a significant percentage of business institutions to promote various activities within Africa’s different sectors, including the service sector. For instance, in various major towns in Africa, several institutions are identified to aggressively promote services by use of different means, such as the provision of aid in the form of expertise and, at the same time, reaching out to others across the region. However, the approach as applied in this research provides the possibility of granting a better focus towards the study on development efforts as posed by issues on potential investments in Africa. In this particular study, all the economic sectors that entail service, manufacturing, and agricultural sectors are considered dependent on provisions from external ties with foreign countries on an equal basis (Liu & Tang, 2018).
A study by Liu and Luo (2021) asserts that the regional economic imbalance largely contributes to further assistance from external institutions. For instance, the prevalence of poverty within some African states is believed to be under the influence of political conflicts and wars. Since the 1950s, sparse development across Africa has triggered migration to find work and access higher education. The subsequent issues on underdevelopment that have rocked the region have been spurred by civil wars, conflicts, and economic recession. A larger percentage of the migrants are youths who target regional labor markets.
The policy initiatives from the regional perspective, as adopted from African Union MOU in 2015, consider development and resource management as one of the problems in Africa (IOM, 2016). This is identified as something that can be solved regionally by enhancing the capacity of regional countries to manage their resources. Different factors propel African countries to prefer relating with China to the other regions and therefore incline towards the destination with better offers. The aspect is not dependent on the policy of either forced or voluntary agreements. This, from a narrow perspective, reflects on the motive of individual countries rather than the primary causes behind the various motives. Therefore, some of the complex factors that influence development from aid include politics of governance, political economy, social networks, and geographical influences (Lancaster, 2009).
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