Have We Reached Peak China-Africa?

The 2018 Forum on China-Africa Cooperation summit in Beijing wrapped up last week with the expected fanfare following the announcement that the Chinese provide another $60 billion financial package.

While that $60 billion figure was the same as the amount offered in the 2015 FOCAC financial package, the allocation of the funds is very different.

Billions of dollars of interest-free grants (the free money) were replacement by concessional loans (interest-bearing debt). Almost 20% of the entire package, $10 billion, is devoted to attracting Chinese investment to Africa. While that sounds great, it’s really not that big of a deal since China already invests around $3 billion annually in Africa.

So, with a FOCAC package that is arguably more beneficial to China’s lenders than Africa’s borrowers combined with a steady downturn in trade, a growing number of analysts are starting to conclude that we have reached the peak of China’s economic relationship with Africa.

Longtime China-Africa scholar Luke Patey, a senior researcher at the Danish Institute of International Affairs, is among those who believe that the outcome of this year’s FOCAC summit clearly demonstrated that Africa now has a diminished role in China’s global economic agenda.

Luke joins Eric & Cobus to discuss what’s behind this trend and his provocative column in the Financial Times on why the “Chinese Model is Failing Africa.”

Join the discussion. Do you agree with Luke and other scholars who suggest that we may have reached the peak of China’s economic engagement in Africa as China now looks elsewhere for safer, more profitable investments? Or do you think these skeptics are wrong? Let us know.

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Twitter: @eolander | @stadenesque | @LukePatey

Email: eric@chinaafricaproject.com

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