If you’ve been watching, China has been making major investments on the African continent. Since 2009, trade between Africa and China has quadrupled, and today China is Africa’s largest trade partner. In mining, infrastructure and agriculture, China has spread its development wand in Africa. This bodes well for the countries where China is active. But I’m a cynic and wonder what’s in it for China? What is the long-term ROI of these major monetary expenditures for China?
I’d love to imagine that this flow of money was an altruistic exercise by a benign benefactor, but remember, I’m the cynic. So as I view the impact of China’s ‘largess’, some possibilities present themselves as potential benefits to China’s government and businesses.
Experts speak of the immense resource wealth of the Africa continent. Most often we hear of the oil wealth, but it’s Africa’s mineral wealth that will drive the future of technological advance. The African continent is rich in mineral resources such as copper and cobalt, both essential for producing the digital products that drive our lives. China as the world’s leading producer of “things digital” needs access to Africa’s mineral wealth.
But for greatest efficiency, China needs more than just access to markets. To move materials out of mines and into factories, getting products to ports and transporting manpower demands a modern and efficient infrastructure. Roads, railways, airports, power distribution and communications are essential to efficient manufacture. These sectors represent many of China’s investment projects. Assisting African nations to build their infrastructures can bring benefits as they source materials, and move production to Africa.
Though a small part of China’s current African investments, China and African nations are cooperating on significant agricultural projects. With a growing population, continuing urbanization, and the effects of negative environmental practices on farmland it’s becoming more difficult for China to meet its need for food. Africa is has 60% of the planets uncultivated land. With an established foothold on the African continent, it’s easy to see how China would look to Africa meet their food security goals.
In 2007, the head of China’s Export Import Bank declared that his institution was prepared to offer financial help to Chinese farmers to settle in Africa. China’s government distanced itself from the statement, though other Chinese officials appeared to support this possibility.
By estimates, over one million Chinese migrants are on the African continent. These migrants haven’t come because of any government plan. They are in Africa to search for economic opportunity. And many are finding it. Chinese migrants have small agricultural projects, most of these supplying specialty Chinese foods for the burgeoning expatriate Chinese population. And it may be population that holds the key to China’s ‘long game’.
With 1.4 billion people and growing, China has the planet’s largest population. As China’s population grows, urbanization crowds their cities, and food production decreases from their farmlands, it becomes possible to imagine a time when those pressures could strain China’s national stability. When and if China can no longer manage it’s burgeoning domestic population, Africa could be the ultimate release valve for China’s surplus population! The long-game?
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