China is seeking to expand its international markets in the face of growing trade restrictions from the West; Africa wants investments that will boost its development and increase the added value of its industries. Both have found a common ground in green technologies. And the macro summit on cooperation between China and Africa held this week in the capital of the Asian giant, in which both blocs have staged their economic and geopolitical love affair, has provided the perfect opportunity to match supply and demand.
Chinese President Xi Jinping opened the conclave on Thursday with a speech calling for jointly promoting environmentally friendly modernisation. “China is ready to help Africa build green growth engines,” he told more than 50 heads of state and government from African countries gathered in Beijing’s Great Hall of the People, a massive Soviet-style building on Tiananmen Square. The president pledged to launch 30 clean energy projects as part of the action plan for Africa over the next three years. He announced financial aid of nearly 46 billion euros and the intention to create one million jobs on the continent. UN Secretary-General António Guterres, another of the event’s star guests, proclaimed shortly afterwards: “The alliance between China and Africa can drive the renewable energy revolution. It can be a catalyst for key transitions in food systems and digital connectivity.”
Chinese President Xi Jinping has pledged to launch 30 clean energy projects as part of an action plan for Africa over the next three years.
Many factors explain China’s green turn towards Asia. Perhaps the biggest of these is its powerful, planned – and heavily subsidised – clean-tech industry. It has invested 10 times more than all of Europe in the solar industry over the past decade, and its companies control 80% of the value-added chain in this industry, according to a 2022 report by the International Energy Agency. “This means that countries in the Global South interested in renewables will almost certainly source components and know-how from China,” says Cobus van Staden, one of the editors of The China-Global South Project and host of the China in Africa podcast, in a recent article about the summit.
Exports of what China calls the “new trio” — electric vehicles, lithium-ion batteries and photovoltaic products — grew by 30% in 2023, according to the Chinese government’s work report. The productive machine is running at full throttle. It is part of the new growth model devised by Communist Party leaders to reinvigorate a slowing economy plagued by the bursting of a property bubble. They are the new productive forces, as Xi Jinping has called it, a slogan with Marxist echoes but projected toward a hyper-technological future.
But this overcapacity has become one of the main problems between China and the West. The European Union and the United States have reacted with tariff increases on products such as electric vehicles and Chinese photovoltaic products, arguing that the industry is unfairly subsidized. “They are facing increasing barriers in all their traditional markets in the North,” Cobus added in an online chat with correspondents last week. And one of the solutions is to pivot supplies to places like Africa. He also foresees a greater presence of large Chinese technology companies – which the West has also placed on its blacklist – such as Huawei, which could come into play in the improvement of electrical networks on the continent, one of the fields into which the Shenzhen-based company is diversifying.
Exports of what China calls the “new trio” — electric vehicles, lithium-ion batteries and photovoltaic products — grew by 30% in 2023
The trend is already being seen in the channelling of investments, says Zhao Yage, a 44-year-old Chinese citizen who works as a consultant at CHN Energy Investment Group, a Chinese state-owned giant with interests across half the globe. “The government has the policy and specific funds to support it.” Zhao is among a thousand Chinese and African businessmen and executives invited to a special meeting on the sidelines of the African summit in Beijing. It is Friday, and dozens of people mill about, networking over coffee and exchanging business cards in a lobby of the National Convention Centre in Beijing. Premier Li Qiang is about to give a speech. The sober suits of Asians mingle with the colourful African clothing.
Opportunities for Chinese companies
The Chinese offer sounds good to African representatives. “It is very interesting because today, in Central Africa, Gabon is a leader in sustainable development,” says Ghislain Moandza Mboma, director general of the national agency for the promotion of investments in this country, another of the guests. The relationship between China and Gabon has been strong for years. The Asian country is the main destination for the country’s resources, which mainly exports oil and manganese, one of the components of lithium batteries. Moandza Mboma has come to sound out private investors. His public agency is deployed in all sectors, from roads to the exploitation of mines and hydrocarbon deposits. In any case, he assures that green has become one of the “strategic axes” of development policy in his country.
In Africa, where only 44% of people have access to stable electricity, there is a huge demand for energy, which also slows down the process of industrialisation. “Filling this gap in a sustainable way offers significant opportunities for Chinese companies,” Cobus adds in his article.
China is Africa’s largest lender, investor and bilateral trading partner, but the gigantic infrastructure projects it began implementing a decade ago as part of the New Silk Road, the mega-programme with which it aims to connect the world, are now behind it. The volume of loans peaked in 2016; by 2023 they amounted to a fifth, and more than half were transfers to the financial sector, which the Global Development Policy Center at Boston University interprets as a possible search for risk mitigation to avoid exposing Beijing to the debt problems of African states.
Smaller-scale and often modular in their implementation, green projects fit in with the Chinese government’s new philosophy, summed up in the slogan: “Small, but beautiful.” That is, projects with budgets of between 100 and 250 million dollars (between 90 and 225 million euros), shorter repayment periods and the use of mixed public-private financing.
Fourth industrial revolution
Analysts warn that the new course, which will involve a significant increase in Chinese exports, could worsen Africa’s already huge trade deficit with China. African partners have already noted that Beijing has not fulfilled its commitment at the last summit, held in 2021 in Dakar, to buy African goods worth 300 billion dollars (about 271.4 billion euros). Throughout the summit, African leaders have called for greater access for their products to the People’s Republic, and to accelerate the transfer of Chinese technology, to move their industries up the value-added chain. “In the era of the fourth industrial revolution, China is facing a new wave of economic growth, and it is a challenge to achieve a new level of economic growth.” […] “The issue of technology transfer is urgently needed to improve Africa’s productive capacities and, consequently, reduce the magnitude of our trade deficit,” said Moussa Faki, Chairperson of the African Union Commission, in his opening remarks on Thursday.
“Africa has the potential, its population is very young,” said Assane Mbengue, president of the Federation of China-Africa Friendship Associations, shortly before the summit opened. The Senegalese man is calling for more producti
on made in Africa and more educational exchanges. He says he came to study in China in 1978. Beijing has now set up more than 60 Confucius Institutes on its continent. These cultural institutions are often criticised in the West, where their opponents accuse them of being propaganda tools, threatening the academic freedom of their partners and even harbouring spies. In Africa, one of the latest was opened in December at the University of Venda, in the rural South African province of Limpopo. This is a Confucius Institute of Green Technology, where Chinese language teaching is combined with training in renewable energy.
You can follow Future Planet in X, Facebook, Instagram and TikTok and subscribe here to our newsletter.
#China #Africa #outlet #clean #technologies
