Thursday, January 7, 2016

China's economic penetration of Africa

The conventional wisdom has been that China is on the march in Africa,using its aid and investment to win friends and secure commodities for its home markets. Two students of Chinese activity paint a different picture in the Washington Post's Monkey Cage. Winslow Robertson and Lina Benabdallah say that President Xi's recent pledge of $60 billion in Chinese contributions is less significant than it sounds.  The authors note:
It depends on how one defines aid – essentially most Chinese money in Africa is in the form of loans – but there is no real correlation between aid and other resources. OECD-defined Chinese aid into Africa is a little over $2 billion a year, while U.S. aid is around $8 billion.
They also point out:
China recently announced that its cumulative Foreign Direct Investment (FDI) into Africa from 2000 to 2014 is $30 billion. As of 2012, China has been investing a little more than $2 billion annually into Africa.

That may be a lot — but it’s less than the U.S.’s annual investments in Africa.
I don't doubt Chinese intentions, but their actions may be less significant or effective than  we thought.

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