Chinese Lavishly Welcomes African Leaders whom it Intends to Lend Less to
From September 4th to 6th, several dozen African heads of state and government are participating in the China/Africa summit. The Middle Kingdom is expected to strengthen its presence on the continent by signing new agreements and loans.
China is already very present on the African continent, but it is set to further enhance its presence. However, China’s African policy is evolving and is no longer the same as before.
Since the early 2010s, China has poured billions of dollars into Africa. From Angola to Djibouti, the DRC to Kenya: 100,000 kilometers of roads and highways have been built, along with 10,000 kilometers of railways, hundreds of ports, and hydroelectric power stations. These massive loans to Africa have funded these mega-projects.
Times have changed, and today, China no longer has the means to spend recklessly. The Chinese economy has been experiencing a slowdown since Covid, and under these circumstances, the communist regime cannot afford to take undue financial risks.
The amount of new loans that will be granted this year will be revealed after the summit, but it will be far from what was announced, for instance, in 2016, with nearly $30 billion in loans for Africa. In 2023, Beijing offered $4.6 billion in loans.
A New Chinese Strategy
In 2023, at the Belt and Road Forum in Beijing, the Chinese gave a preview by announcing that they now aim to prioritize smaller, less financially risky, and more environmentally friendly projects.
China intends to fund projects focused on direct aid to populations with an increased number of programs, for instance, to combat poverty. Often criticized for its stronghold on Africa, Beijing hopes to improve its image and also avoid accusations of African countries being indebted to China.
The communist regime no longer wants to be accused of causing financial distress in certain countries. In this context, the old model of loans signed directly with states is over, and the Chinese prefer to work directly with commercial banks as intermediaries. The projects may be less grandiose, but potentially more profitable.
China’s presence may become more discreet, but with a firm commitment to remain engaged in Africa. With the United States, China aims to maintain and strengthen its economic and political influence.
