africa

Yale Center for the Study of Globalization
primarily as an instrument of diplomacy, taking effect through, for example, supplying
medical teams or building stadiums and conference centers. For third parties,
awareness of the distinction between development assistance and economic cooperation
is critical for efforts to engage the Chinese: OECD countries and multilateral
development banks should engage with their counterpart Chinese entities (export
credit agencies, state-owned banks), and shift away from “donor-recipient” thinking.
The scope of Chinese economic engagement with Africa is very large and still
growing rapidly. In 2013, Chinese trade with Africa 1 reached US$210 billion, almost
double the figure of US$107 billion in 2008, and up from US$19 billion in 2003. China
became Africa’s largest trading partner in 2009. China-Africa trade has grown at an
average annual rate of 29 percent over the past decade, although the rate slowed
to 6 percent in the past year, reflecting slower growth in both Chinese exports (9
percent) and African exports (3 percent). Chinese premier Li Keqiang predicted
during his May 2014 visit to Africa that China-Africa trade would reach US$400
billion by 2020.
The stock of Chinese foreign direct investment (FDI) in Africa at the end of 2013
is reported by Chinese sources at more than US$25 billion. This does not include
Chinese-owned FDI originating from offshore financial centers such as Hong Kong,
Cayman Islands, or Luxembourg. In 2012, annual Chinese FDI flows to Africa were
US$3.61 billion, and for 2013 preliminary figures report a similar amount of US$3.77
billion. Other sources, tracking media reports, note that Chinese firms committed to
US$6.76 billion in large investment projects (greater than US$100 million) in Africa
in 2012, although not all of these investments will be realized, and some will be
smaller in scale than originally reported. Mining is the largest sector (25 percent),
followed by construction (23 percent), finance (18 percent), and manufacturing (16
percent). South Africa continues to be the largest investment destination, with 22
percent of total Chinese FDI stock in Africa. Since 2007, the China Africa Development
Fund, an equity fund established by China Development Bank, has invested
US$2.39 billion in equity in 61 projects, many of them joint ventures and most of
them export oriented. According to Chinese sources, African countries had investment
stocks of US$14.2 billion in China as of 2012.
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