The Paradox of China’s Transformation
Social Investment Forum International Working GroupSpring Symposium 2010Washington, D.C.18 May 2010
The Role of China in Africa: Trade, Investment and Aid
Remarks by David H. ShinnElliott School of International AffairsGeorge Washington UniversityI am pleased to participate in this panel session dealing with the role of China inAfrica. I have been asked to focus on the drivers that bring Chinese companies to Africa.It is important to look first at China’s principal interests in Africa. They are relevant tothe engagement in Africa of Chinese companies as the larger ones are mostly state ownedor controlled.
First, China has an interest in maintaining access to oil, minerals and other natural resources.
Second, China desires to leverage political support from as many of Africa’s fifty-three countries as possible. They constitute more than one-quarter of the membership of the UN.
Third, China wants to end diplomatic recognition of Taiwan by the four African countries that continue this relationship.
Fourth, China sees Africa and its population of one billion people as agrowing market for Chinese exports.
Overview of China-Africa Trade Relations
It was not until China became a manufacturing powerhouse in the 1990s thatChina-Africa trade began to rise impressively. China’s “going out policy” sought to findnew markets for Chinese exports while its rapidly expanding economy required largequantities of raw materials. China-Africa trade rose from $5 billion in 1997 to $11 billion in 2002 and, driven by high oil prices, peaked at $107 billion in 2008 beforefalling back to $96 billion in 2009.Since 1995, China-Africa trade has been largely in balance, although the fall inAfrican commodity prices in 2009 led to a significant surplus for China. China isAfrica’s second largest trading partner after the United States and is projected to pass theUnited States this year. China exports a wide array of products to Africa led bymachinery, textiles and clothing, transport equipment, footwear and plastic products. Oil,minerals, base metals, stone products and raw logs comprise almost 90 percent of Africa’s exports to China.About 80 percent of Africa’s exports to China come from only five oil andmineral exporting nations. China became an oil importer in 1992 and African countriesnow provide almost one-third of China’s petroleum imports. This constitutes, however,