The Economic Belt along the Silk Road: China’s trillion-dollar plan to achieve economic domination
China has been a major force in building economic growth for many African nations. The Asian superpower is the continent’s largest trading partner and has been increasing its investment in exchange for natural resources. China aims to provide one trillion dollars in financing to Africa by 2025, much of it for infrastructure projects like roads, railways and airports, but as business ties deepen on the continent, who benefits from the China- Africa relationship?
The past three decades have seen a marked step change in Africa’s international relations. While geography historically favoured a European focus, the continent has recently shifted its gaze to the far East. China has catapulted from being a relatively small investment player in the continent to becoming Africa’s largest economic partner. Africa-China trade is poised to grow 20% year on year making it seem like dragons are the new kings of the African jungle. However, Africa is at the tip of a larger economic aspiration. This is all part of China’s “Belt Road initiative”: the most ambitious infrastructure project in modern history, that’s designed to reroute global trade. The attempt to revive the “ancient Silk Road trading” is how China plans to become the world’s next superpower.
In 2013 the Chinese president Xi Jinping. gave a speech in Kazakhstan where he mentioned the Ancient Silk Road: a network of trade routes that spread goods, ideas and culture across China and the Far East with the Middle East and Europe as far back as 200 BC. The underlaying message being that these two countries should take an innovative approach and jointly build an economic belt along the Silk Road. The Silk Road was first established when the Han Dynasty in China officially opened trade with the West in 130 B.C. The routes remained in use until 1453 A.D., when the Ottoman Empire boycotted trade with China and closed them. Although it’s been nearly 600 years since the Silk Road has been used for international trade, the routes had a lasting impact on commerce, culture and history that resonates even today.
Chinese aid to Africa has been criticized for being a form of economic colonization. The political aid has been used to create strong bilateral ties between African countries and China. Because of China’s willingness to loan money to unreliable countries, many experts have called the BRI a risky plan. Eventually these countries have to pay China back, but corruption and conflict make that payback unlikely. A recent report found that many countries indebted to China are vulnerable. So why does China keep lending money? Perhaps there is more to the BRI then just economics: as China’s economic interests expand in Africa, so does the need to protect them. A way of doing that was to offer the tiny East African state of Djibouti water transport, supply projects, as well as a liquefied natural gas. The underlying message being that these two countries should take an innovative approach and jointly build an economic relationship.
By the end of 2017 it was clear that Djibouti couldn’t pay back the loan, so instead the government gave China control of the port as part of a lease. Given Djibouti’s strategic location and the fact that China had been using it as a supply base for its anti-piracy operations since 2008 the overtake didn’t come as a surprise. On the contrary the move was noteworthy given that the U.S. already had a military presence in the country and the location grants access to the Red Sea and Suez Canal, through which lies access to European markets.
South Africa President Jacob Zuma and Chinese President Xi Jinping talk at the closing of the Forum on China-Africa Cooperation in Johannesburg in 2015. (Photo: SA Government, Flickr)
As a result many believe that the deals between the African lion and the Chinese dragon are vital for young Africans in pursuit of work opportunities. The huge infrastructure boom is absolutely necessary for this to happen. After all, the West is neither capable nor does it have the appetite to step in, to close the infrastructure deficit on the continent. At the same time opposing opinions say that it means the exploration of the continents precious minerals, joblessness of the people, loss of land and the slaughter of Africa’s prized wild life.
So, has this relationship been as good for Africa as it has been for China? Despite the substantial investments, most of them have been routinely cast as detrimental to Africa’s overall competitiveness. The projects are dependent on deals made at the top political levels. They lack of competitive and transparent bidding processes, and most of the work force employed at these ventures has been Chinese. Promises of job creation have not been fulfilled. Further, when Africans are hired, local rules and regulations are often ignored, leading at times to poor safety. For instance, at Chinese-run mines in Zambia’s copper belt, employees must work for two years before they get safety helmets. Ventilation below ground is poor, and deadly accidents occur almost on a daily basis. More frequently, jobs are lost to Chinese employees, who are ferried in project by project. For example, the growing Chinese presence in South Africa may have cost the country 75,000 jobs from 2000 to 2011. In Nigeria, the influx of low-priced Chinese textile goods has caused 80% of Nigerian companies in this industry to close.
It’s through projects like these that China found a way to boost its economy. Chinese construction companies that had fewer opportunities within their own country saw a huge boost from BRI contracts. What tips the balance in China’s favor even more is a requirement that it be involved in building these projects. China’s involvement is one of its very few demands and that’s set these deals apart so far. To get investment from the west, countries have to meet strict ethical standards.
China’s big move in Africa is a sign of what’s been called the string of pearls theory. It predicts that China is trying to establish a string of naval bases in Africa and in the Indian Ocean, that will allow the Asian giant to station ships and guard shipping routes through the two regions. So while China may not get its money back, it is still achieving some very important strategic goals.
China’s growing influence challenges the status of the Western countries, especially the U.S., which has been the world’s lone super-power for the last several decades. But isolationism is becoming more popular in the US, meaning it is investing less and therefore losing influence around the world. Meanwhile China is leaving its isolationist past behind by taking steps to open up the banking, finance and the manufacturing and service sector.
The BRI is China’s way of leveraging power to become a global economic leader. By building relationships and taking control of global trade, China is well on its way.