Here’s Why You Should Care About China’s Investment In Africa: FOCAC In Review

China’s relationship with Africa is significant and long-standing. However, it is also constantly evolving. One of the strengths of Chinese foreign policy is its ability to adapt both to its own capabilities and the needs of the countries it works with. This constant evolution is one of the reasons that China’s involvement can pose such a strategic risk to American interests since it is extremely responsive to developments on the continent.

One such example of this evolution is the most recent Forum on China-Africa Cooperation (FOCAC) that was held in Dakar, Senegal, at the end of 2021. During this forum, China announced several new programs, initiatives, and funding that significantly changed how Chinese investment in Africa will be conducted and holds broad implications for understanding Chinese involvement in Africa for the foreseeable future.

What is FOCAC?

FOCAC is a triennial conference that China hosts for African stakeholders in both the government and private sectors. This summit is often chaired by Xi Jinping, the President of China. For African governments, this summit represents an opportunity to interface with one of the most dominant global economies and participate in the international system. Consequently, many African leaders are drawn to FOCAC. Indeed FOCAC is so popular among African governments that more African leaders attended FOCAC than the United Nations (UN) in 2018.

China uses FOCAC as one of the cornerstones of its foreign policy. It is through FOCAC that China typically announces and deploys its multibillion dollar investment plans for Africa. For example, in 2018 FOCAC was the epicenter of Chinese promises of $15 billion in grants and $60 billion in financing provided by China to Africa. More than just the economic promises and announcements though, China also uses FOCAC to push its messages. At the 2018 FOCAC, President Xi made explicit the Chinese promises to support Africa and not interfere in internal African issues like development plans and governance. While this message sounded positive overall, one cannot ignore the subtly underpinning of comparison with Western powers who have time and time again tried to “interfere” with local African issues by threatening to remove assistance due to human rights or other humanitarian concerns.

Shifting Away from Big Budget Infrastructure to Trade and Credit Facilitation

This most recent FOCAC in 2021 continued several of China’s foreign policy trends while evolving several of its investment and interaction strategies. The most notable change was a significant reduction in the size of China’s financial commitments. China only pledged $40 billion in assistance to Africa which, while still a sizable sum, is only 2/3rds the size of its commitment in 2018 to $60 billion. This scale back is not limited to the total size of the financing package. Indeed, several Chinese programs ranging from agriculture to education are receiving cut backs designed to improve the quality but reduce the quantity of the programs.

Most significantly, China is also moving focus away from infrastructure to trade. Notably, unlike previous FOCAC’s, where infrastructure has been the foundation of Chinese involvement in Africa, in 2021, plans for new infrastructure projects were not given. This was likely due to both China’s economy slowing down, limiting their ability to spend exorbitant amounts overseas, and their previous infrastructure lending agreements leading to their controversial acquisition of projects like Uganda’s national airport and Kenya’s Mumbassa port. However, they are still increasing their involvement with Africa through trade relations. According to President Xi, China aims to increase its imports from Africa from $72 billion to $300 billion in the next three years. For China, this likely means increasing the natural resources they already import from Africa. For Africa, this represents an economic promise that could offer great prosperity for the countries able to take advantage. All while avoiding the potential controversies of offering loans to develop countries who may not be able to fully pay them back.

Likely for a similar reason, China is shifting away from dumping large sums of assistance into Africa and is moving to the support of African financial institutions, like banks and credit lenders, to help finance African investment projects. This allows China to place a buffer between itself and African projects. Since they are supporting the credit lenders, they have minimal responsibility for the loans and minimal culpability if the lender has to collect on a controversial deal. China is also created nine programs to tie China and Africa even closer together: the medical and health programme, which will deliver 1 billion doses of the COVID-19 vaccine, the poverty reduction and agricultural development programme, the trade promotion programme, the investment promotion programme, the digital innovation programme, the green development programme, the capacity building programme, the cultural and people-to-people exchange programme, and the peace and security programme. These programs promise to support Africa in everything from public health, national economies, and public safety.

The best way to understand Chinese policy in Africa is a close examination of FOCAC. From such an examination of the most recent FOCAC it’s clear that Chinese foreign policy in Africa is evolving. China can no longer afford massive infrastructure investment loans that create controversy. Instead, China is seeking to focus on qualitative programs that will bring China and Africa together without overly endangering Chinese economic assets. China’s involvement in Africa will always be significant. However, their newest FOCAC plan illustrates that China is seeking to move away from being Africa’s financier to its support. Instead of building massive infrastructure systems at largely its own cost, China will seek to use its resources to support the investments they have already created and further develop African nations who can in turn import their goods to constantly demanding Chinese markets.

Luke Argue

Luke Argue

Luke Argue is a junior at Patrick Henry College in Purcellville, Virginia, where he studies Strategic Intelligence in National Security. Luke serves as the Deputy Project Manager for Patrick Henry's African Strategic Threat Assessment Review which studies Chinese activity in Africa. At the Dark Wire, Luke primarily studies China and Chinese politics, especially the intersection between international politics and cultural developments, the influence of international soft-power, political philosophy, national security strategy, and U.S.-Chinese relations. Luke grew up in San Diego, California, and spends his free time reading, listening to music, and playing Volleyball. Linkedin: https://www.linkedin.com/in/luke-a-bb4823120/