While western countries moan and whinge about the motive of China's investment and trade in Africa, China is forging ahead pursuing a unique type of cooperation path that has endeared it, not only to Africa but also to other developing countries in South America and the Middle East.
The United States of America (USA), and the European Union have characterized China's growing influential role as a form of neo-colonialism. In their view Chinese investment in Africa is meant to extract natural resources, oil in particular, from the continent in order to meet China's seemingly infinite need for energy.
In 1978, China had no foreign investment and very little trade. In 1980, the total Sino-African trade volume was $1 billion. In 1999, it was $6.5 billion, and in 2000, $10 billion. By 2005, the total Sino-African trade had reached $39.7 billion before it jumped to $55 billion in 2006. Trade between China and Africa increased 700 percent during the 1990s.
The two-way trade between China and Africa since 2000 has been growing by about 30% each year reaching a record $166.3 billion in 2011 in comparison to $82 billion for the US. This included Chinese imports from Africa equaling $93 billion, comprising mainly of minerals ores, petroleum, and agricultural products between Africa and China. The rate of growth of Chinese imports to Africa exceeded the other way.
Cumulative Chinese direct investment in Africa has exceeded $15 billion, with investment projects covering 50 countries. It has met the pledge it made at the last FOCAC meeting in 2009 of providing $15 billion of lending of a preferential nature to Africa.
While China imports natural resources, it exports mostly finished products, manufactured goods and textiles with Africa, enjoying a trade surplus. China also has substantial investments in telecommunications, infrastructure, transportation and fisheries. Up to 800 state-owned enterprises operate in Africa. European countries - Africa's traditional trading partners and its former colonisers - are losing ground to
By 2006 China had become the largest exporter to Africa and 2008 had overtaken all the former European colonial powers. If the European Union is counted as a whole, however, it still lies well ahead of China. The western industrialized countries, taken together, are by far Africa's most important trading partners.
Although the block of Western industrialized countries as a whole will remain Africa's most important trading partner in the medium term and will retain a key position as foreign investors, China is gaining ground quickly and thus increasing the intensity of global cooperation, including Africa.
In addition to securing supplies of energy and raw materials Chinese foreign trade policy is geared towards opening new markets for Chinese export goods. But Africa has benefited as well. Chinese trade and investment in Africa has helped spur consistently high economic growth. The International Monetary Fund estimates a growth of 5.8 percent Sub Saharan Africa as a result of such investment.
Addressing the fifth ministerial FOCAC conference held in Beijing last month, President Hu Jintao of China said in the next three years one of his government's priorities will be to expand cooperation in investment and financing to support sustainable development in the continent. To that end China will provide $20 billion of credit line to African countries to assist them in developing infrastructure, agriculture, manufacturing, and small and medium-sized enterprises.
China's top five African trading partners are Angola, South Africa, Sudan, Nigeria and Egypt. Only one of them, South Africa, is not an oil producing country.