Imen Khemakhem – YSMCHN – Policy Analysis -- 2022

China versus the United States geo-economic African aftermath

Following the cold war, countries are more apt in altering their foreign policies to align with
their geoeconomics purposes. With China and the United States in the front, this phenomenon is
seizing national interests and is prevailing over geo-politics.

Briefly, geo-economics is the use of economic tools as a state craft, instead of military tools per
se. It is the use of power politics by economic means1. Nevertheless, as similar as it is to
international political economy, geo-economics deals with a narrower range, as it is focused on
geographical attributes of countries. Using geo-economics is less apparent than military
interventions, as it is less noticed by the public opinion and media, as it is not cruel and human in
the broader sense. The tools used can be positive, negative, or strategic. Positive, such as
humanitarian aids, investments, finance, and trade. The negative instruments (aka used for
negative consequences), can be translated through economic sanctions, cyberattacks, taxes on
foreign products usually as punishments for political moves. At last, strategically such as well as
governments purchasing other governments’ debts to refrain movements2.

As such, ‘’The logic of geopolitics is traditionally zero- sum, while the logic of economics is
traditionally positive- sum2’’ . Geo-economics started 30 years ago, and is only revealing itself
during this century, more and more countries are joining the field and the impacts are already
shaping our world balance.

Currently, in terms of total capital invested -a prominent geo-economical tool-, China persists as
the highest foreign development investor in Africa. From 2014 to 2018, China have invested
more than $72 billion in Africa, generating more than 137 000 jobs3. Impressively, China has not
contributed to economic growth through most of its projects, but it has contributed more than
twice as much as France and the United States in dollars, making it one of the top investors in
FDI4. Another source stated China as the first top economy followed by Luxemburg with a value

1
Geo-economics and power politics in the 21st century the revival of economic statecraft Mika Aaltola, Mikael
Wigell, Sören Scholvin (2018)
2
STRATEGIC SECURITY ANALYSIS Geo-economic competition:global disruptions from the new frontline by Jonathon
Cini.
3
https://afr-ix.com/comparison-of-fdi-in-africa/
4
https://afr-ix.com/comparison-of-fdi-in-africa/
 Imen Khemakhem – YSMCHN – Policy Analysis -- 2022

of 133 billion American dollars, when it comes to foreign investment development in the world5.
The most recent source declared China as the largest investor in Africa for the last 10 years
followed by the US, and France6.

A free trade African treaty was supposed to become operational on July 1, 2020, namely
“African continental free trade area”, transforming Africa into the largest free trade area, when it
comes to the participants number (Garth L. Le Pere 2021). Nevertheless, the US and China still
have an excessive influence over the continent through institutionalized trade, foreign direct
investments and cooperation frameworks, though regional trade agreements remain the main face
of geo-economics. (Garth L. Le Pere 2021).

As a background introduction to the Chinese and American leverage over Africa, certain
organizations and agreements must be shed to light. The Chinese geo-political and geo-
economical leverage can be represented through foreign direct investments by private and public
Chinese companies, the belt and road initiative to connect between Asia, Africa and Europe, the
Chinese banking systems, and mainly the forum on China – Africa cooperation. As for the
American leverage, it can be translated primarily through the US African Growth and
Opportunity Act (AGOA), which includes conduct codes, participation standards, and various
parameters that those African countries have to abide by to benefit from it (Mzukisi Qobo et al,
2019). According to the Economist, those two giants are currently Africa’s biggest trade
partners7. This in turn escalate the rivalry between the two countries, with a flagrant contrast in
ideologies, goals, strategies and market conducts.

In this era, the United States as a prominent liberal figure in international relations is bound by
several universal treaties, rules of law and conducts, which translates into narrow foreign policy
possibilities and capacities vis a vis Africa, and as such cannot deal lightly when it wants to
acquire deals with the African continent -As several countries are authoritarians with various
violations and crimes against humanity allegations-, and thus have to go the hard way for
resources. Meanwhile, China have been trading and dealing with oil rich countries to extract
their riches, in exchange of investments, UN council veto protection, and various infrastructure

5
https://hbs.unctad.org/foreign-direct-investment/
6
Business Insider Africa China ranks ahead of America as the largest investor in Africa since 2010
VICTOR OLUWOLE February 20, 2022 11:20 AM
7
https://www.economist.com/leaders/2019/03/07/the-new-scramble-for-africa
 Imen Khemakhem – YSMCHN – Policy Analysis -- 2022

deal. Thus, the imbalance in the choices laid out in front of the Chinese Republic and the United
States.

During this paper, the Chinese invasion of Africa will be discussed from a realist and neo-realist
point of view to discern the main incentives behind its geoeconomic strategies, and the effects of
such statecraft by reach, and amplitude. Similarly, the American stance will be briefly discussed
to articulate a liberalist and realist position of the American African relation, and thus address
recommendations vis a vis the main American constraints, the Chinese threats, and a possible
future foreign policy direction for the US to maintain its position as the world main superpower.

The rise of Geo-economics:

Prior to a thorough engagement in the topic, geo-economics should be discussed from a

theoretical and scholarly point of view. Scholvin, S., & Wigell, M. (2018) introduced geo-
economics as a state foreign policy tactics, that applies economics, as a tool to achieve strategic
goals. The authors insinuated that the doctrine transcends IR realism, as it is fixated on
geographical characteristics, that are rooted in foreign politics and IR, as such geo-economics
concerns the power that is based on economics, and that have a geographical dimension.
Moreover, Scholvin, S., & Wigell, M. (2018) tried to highlight the controversies of the discourse,
and a probable distinction between it and international political economy (IPE). They questioned
its relevance, as to be defined by its means or its ends? As used only by states, or even private
enterprises? As to be complement military statecrafts, or be on another spectrum? As to being a
policy-oriented version of IPE or related to geo-dimension issues. Thus, the evolving
conceptualization of the framework, that the only solid component rests upon geography. In an
article, Mohan, G (2015) mentioned the transition from geopolitical to geo-economics, as the
link between “transnational capital” and “domestic political economy”, in which he explained
through the example of China’s effort to secure oil, starting from owning equity shares, to
switching to long term loans. As for Morgan, P. (2019), she went on to categorize and highlight
the possible tools of economic statecraft, mentioning the negative ones as sanctions,
discriminatory trade policies, exchange rate manipulation, cyber-attacks and energy governance,
and the positive ones as aid, investment policies, and preferential trade policies.
 Imen Khemakhem – YSMCHN – Policy Analysis -- 2022

The current Chinese and American Ideologies:

The current Chinese ideology and direction can be thought as expansionist in nature. Schweller.
R (2018) described China as an example of outward nationalism where, economic, and
demographic growth have to lead to territorial and influence growth, and where rising states are
filled with national pride and patriotism. He proclaimed that such outward nationalism is
centered on enlargement -political, economic, territorial- and can induce opposition from the
international system. In the Chinese case, the author articulated that it’s following a policy of
expansion, seeking a greater influence in various areas such as finance, trade, investment, and
aid. He mentioned the Chinese One Belt One Road Strategy, as an important expansion statecraft
linking continents, and transferring power from the west to the east and south. Moreover, he
articulated that China’s current stance is coherent with realism, and its current nationalism is
coherent as well with its legacy. An important point highlighted by the author, is the Chinese
past of shame, and victim nation, creating entitlement to a glorious future, as such was endorsed
socially, leading even to hyper nationalism. China’s rising supremacy can be observed in certain
fields, and sectors.

According to the UNCTAD 2021 report, China is the first globally when it comes to FDI, with
0.9 of its total GDP. On the other hand, the US only devoted 0.4 of its GDP for foreign
investments. The regress of the US has been theoretically tackled by scholars.

Table 1: 2020, China and US FDI Outflows, Source: UNCTAD (2021). World Investment Report 2021: Investing in Sustainable
Recovery. United Nations publication. Sales No. E.21.II.D.13. New York and Geneva.

Year: 2020, Foreign direct Value (Billions of US Ratio To GDP (Percentage)

investment outflows. Dollars)
China 133 0.9
US 93 0.4

For Ikenberry G. John (2018), for the last decades the work dominator has been the west liberal
order, where the US constituted the “first Citizen” of this system, this order being hierarchical in
nature. He argued that the global events -great depression, WW2, cold war- set the stage for an
American led order, built upon liberal internationalism and Franklin D. Roosevelt four freedoms.
Paradoxically, the author asserted that such primary position bonded the US to heavy
 Imen Khemakhem – YSMCHN – Policy Analysis -- 2022

responsibilities vis a vis the global system, as the US became the protector, sponsor, and knight
of the liberal order. He stated that the US found itself running the order, becoming fused in, and
managing its economy, and as such tied to the permanent international institutions, and to its
partners, decreasing their fear of contrastively domination and abandonment. Moreover,
Ikenberry G. John (2018) concluded that the free and western world transformed into a political
community revolving around the US, where they beard commitments, burdens, and modern
challenges. On the other hand, Shweller R (2018) introduced the US as a radical power, shaping
international politics to reform domestic societies and regimes globally, as transforming the
system. He explained the US supremacy as a bipolar pillar to previously defeat the soviet power,
and to currently promote universal rights. He stated that currently the US is building up a policy
of retrenchment and retire, as it is retreating from global influence and current engagements, as
now due to the power distribution around the world, the cost of managing the system is
becoming heavy, relatively to the US capacity. Ikenberry G. John (2018) firstly explained it by
the election of a republican and nationalist president. The writer articulated that the US
supremacy is ending, as allies are becoming losing power, and the balance is shifting from the
west to Asian powers. Comes here the explanation of Schweller. R (2018), naming the
phenomenon as inward-looking nationalism. He described nationalism as an ideology, with
emotional belief as its core, which connects with similar attributes in an endeavor to use state
power. Moreover, he asserted that this ideology can be used by leaders to divert the general
opinion from internal issues, or to back their expansionist policies. In here, the author proclaimed
Trump as an economist nationalist, was against economic interdependence, as it fostered national
vulnerability, opted for the inward nationalism.
 Imen Khemakhem – YSMCHN – Policy Analysis -- 2022

Chinese Influence Model:

After looking through the theoretical aspects of both hegemonies, a real framework of the last
economical events will be put forward.

Table 2 Chinese FDI vs US FDI to AFRICA

Source: Jan 2022, The statistical bulletin of China’s Outward Foreign Direct Investment, US Bureau of Economic
Analysis. China Africa Research Center, Johns Hopkins School of Advanced International Studies.

Table 2 showcases the FDI of both hegemons to Africa. It shows that the US was outrun by
China from 2012, until today. This phenomenon has been discussed by several authors.

Garth L. Le Pere (2021) have discussed the BRI (One belt one Road Initiative) outreach in
Africa, that was valued with 170 Billion US Dollars between 2005 and 2017, whereas he also
mentioned the Sub-Saharan African’s debt to China valued at 24% of the whole Sub Saharan
Debt, and for that China have been using its own geoeconomics platforms such as the AIIB
(Asian Infrastructure Investment Bank) and the NDB (New Development Bank). According to
Power, M., & Mohan, G. (2010), China’s current aid offensive portrays it as a “Rogue Creditor”,
as it lacks political conditionalities, and have deepened African debts, moreover such moves are
legitimized through the shared experiences of colonialism between China and Africa, as part of
the currently developing world. As for Carmody, P. R., & Owusu, F. Y. (2007), they mentioned
the Chinese hegemony and geo-economic strategy goals as following: to maintain access to
natural resources, to reutilize its huge foreign exchange reserves into investments internationally,
to ensure the development of Chinese multinationals, to identify new markets for the Chinese
products and to develop Africa’s agriculture to supply Chinese industry, and as such the
“asymmetric power” projection of China peacefully against the US. The authors also showcased
 Imen Khemakhem – YSMCHN – Policy Analysis -- 2022

the achievement of such goals by mentioning the Zimbabwean example, where now China owns
70% of the country’s electricity generation capacity, and where it is illegal to mention “Zhing
Zhong” (power quality Chinese goods), and where student are learning mandarin. Another
example, also mentioned by them is the change in the Chadian Petrol law in 2005, to enable
government discretion over oil revenue expenditure, and the recognition of Beijing over Taipei,
which lead to the suspension of the World Bank loans. A move that is worth it, in the eyes of the
Chadian government. Carmody, P. R., & Owusu, F. Y. (2007) highlighted the suspension of
western aid to the Central African Republic, in regard to demanding the restoration of the
constitutional order, where in response China bankrolled the entire Central African civic service,
Thus, the maintain of Chinese friendly relation with the western blacklisted countries. According
to Mohan Giles (2015), this transition of some African countries from the West to China can be
explained by the conditions put forward by the International Monetary Fund (IMF) and the
World Bank to African countries, when it comes to money landing, those “adjustment policies”,
forced upon African countries were difficult. Moreover, the Chinese seat in the UN council have
allowed it to shield some African countries when it comes to their undemocratic ways of rules
and conduct, and at the same time ensure the unrecognition of Taiwan by the latter, the one
China policy. This is mentioned by Mensah, C. (2010) in the attempt of China to shield Sudan,
one its main oil suppliers, from the international arena when it comes to the crisis of Darfur. For
Mensah, C. (2010), the five ideational principles are the framework of the Chinese African
relations, and have been the pillar of Beijing’s diplomatic presence, which have been named “the
Beijing consensus (BC)”. The author highlighted the rejection of the BC of the hierarchy of
nations, which allowed Beijing to ignore human rights concerns in its counterparts’ countries and
have its geo-economics interest precede over its responsibility to protect. For Besada (2008), in
this way, China is acting no differently than former European colonial powers in Africa. To
understand the discussed attitude and foreign policy of China towards Africa, the Beijing
Consensus should be briefly discussed. Yin, J. (2020) described the BC as the investment
behavior abroad, stressing on the south-south cooperation, its main attribute is that it does
consider the political environment of the recipients as important, and emphasizes on
infrastructure. The writer proclaimed that this scheme resembles neo-colonialism attitudes, as it
channeled in the form a debt-trap diplomacy, leading to economic dependency. The above
examples showcase the sharp fangs of China, as according to Mzukisi Qobo et al, (2019), China
 Imen Khemakhem – YSMCHN – Policy Analysis -- 2022

is a major obstacle to Africa’s healthy development, as a recent IMF study showed that 1%
growth in the Chinese real fixed investment growth, is correlated with a 0.6% increase in Sub-
Saharan African’s exports, this dependency could have lethal consequence for Africa on the long
term.

American Influence Model:

Moving on for a brief image on the US position vis a vis Africa. Carmody, P. R., & Owusu, F. Y.
(2007) states that the US is exerting an international system maintenance in Africa, by being
immersed in relief, energy procurement, and defense, and as such considers Africa as an arena
for humanitarian intervention, resource extraction and more importantly as a security threat. The
energy procurement, for the writers can be seen through the reorientation from textile trade to oil
trade for African countries, such as for Angola and Chad, which can result in a technology
downgrading in the relative economies, nevertheless while the US is constraining Africa, it also
seeks to legitimate, enable, and empower it through different spectrums. Mensah, C. (2010)
stated that the US Washington consensus unlike the BC, emphasizes on hierarchy, and follows
the same frameworks such as the economic partnership agreements under the Cotonou
agreement, and the Growth and Opportunity Act (AGOA), that renders the African countries
skeptical when it comes to the need to adhere to certain regulations and policies. Mzukisi Qobo
et al (2019) states that the AGOA enables the US president to determine the eligibility of the
African countries for economic agreements and perks based on certain factors such as progress
towards the rule of law, not undermining the US interests, not violating the international human
rights, and not being involved in terrorism. As such, for Mzukisi Qobo et al (2019), the
“nonreciprocal and unilateral arrangements” of the AGOA can be thought as an anachronism in
the liberal world, where perks come with a price. Moreover, the author stated that the AGOA
main exports is oil, which amounted for 86% of the total 2015 share, and besides Africa, only
seven countries -mainly oil rich- have exported to the US with a value of more than 100 million
US dollars, thus a lack of diversity. Blackwill, R. D., Harris et al (2016) have also mentioned the
example of the financial deal to the Democratic Republic of Congo in 2015 of 30 million US
dollar on the condition that the president does not seek reelection, and even the withholding of
the civilian assistance to Egypt for a year after then events of 2013. They also highlighted the US
geo-economic weakness, stating that it is institutional, as it is not able to use trade and
 Imen Khemakhem – YSMCHN – Policy Analysis -- 2022

investment as a tool as much as China, and instead have been developing offensive cyber
weapons. Cohen, H. J. (2020) stipulated the most recent stance of the US when it comes to
Africa, by stating that the Donald’s administration did not focus on the AGOA, and only
articulated an interested in a two-way free trade agreement with only one African country with
reciprocity principle, nevertheless the programs put by Clinton, Bush and Obama sustained.
Moreover, Cohen, H. J. (2020) stated that vis a vis Africa, the administration recommended a cut
of 30% of foreign assistance. This instead reinforces the phenomenon of the declining US
hegemony, and its focus on inward nationalism in its foreign policy, as well as its focus on other
instruments of geo-economics.

Conclusion:

Both the Chinese and American sides are currently maintaining a status quo over African
countries, with the latter employing more political power, instead of an economic one. China’s
game relates more to its economic power as a giant exporter of goods, and importer of natural
resources, its perk is that it does not require human rights standards and regulations from its
counterparts to maintain trade agreements. In return, the US maintains its position as a watchdog
to human rights and the rule of law, and will only maintain economic relations, if the country is
respecting those criteria, which is more unlikely for African countries, nevertheless it portrays its
supremacy through political means (UN council membership), and through military means (US
military bases globally), and its belonging to the powerful west. As such, China is reviving its
influence through investments, imports, and exports to mostly oil rich African countries. Whilst,
the US is maintaining its position similarly economically and also militarily, by foreign
humanitarian aid, and politically by the globalization of liberalism, US led human rights, and
rule of law. As such, African countries are riding the waves of development by trying to
economically develop themselves, and accepting the Chinese aids, in the short term.
Nevertheless, on the long term, they will mostly turn to the west, as a long-term economic
development cannot be done with the democratization and the rule of law in that country. That
model can be seen by the correlation of the rule of law8 in Tunisia, Mauritius, South Africa, and

8
https://www.statista.com/statistics/1204750/democracy-index-in-sub-saharan-africa-by-country/
 Imen Khemakhem – YSMCHN – Policy Analysis -- 2022

Botswana, and their development both economically9 and socially. Thus, geo-economics on its
own cannot guarantee hegemony and supremacy globally, as other statecrafts still matter.

US - Policy Recommendations:

-The US should maintain and fortify its current relations with the western countries mainly, as
they still exert an important influence over the African countries, due to the past colonial events.
Together they should maintain a joint strategy when dealing with the Chinese influence.

-On the long run, the allies of China in Africa would have to switch back to the origin, as the
Chinese expansionist strategy is not sustainable due to its exploitation of resources, and of the
population.

-The US should use its economic power to maintain the position of the dollar worldwide, as a
main currency, it is the representation of its hegemon.

-The US should promote financial transparency, and economic awareness to counter the Chinese
counterfeits.

-The US should broaden its current trade agreements, and economic agendas, to assure a bigger
scope of the African continent.

-The US should utilize its international partnerships and form a coalition to counter China by
research, development, technology, investments, and grant mechanisms.

-The US should work harder on condemning the Chinese violations against human rights of its
minorities, to switch the public opinion towards its unethical rule of law and standards.

-The US should emphasize on its USAID programs to raise awareness about the long-term
effects of the current Chinese strategy by emphasizing on the environmental, labor and trade
costs.

-As a hegemon the US should maintain a powerful image backed by internationalism, democracy
and rule of law, and should be open for dialogue with the Chinese counterparts on various global
issues, to find a common ground that can serve the American interests, and keep China close.

9
https://worldpopulationreview.com/country-rankings/most-developed-countries-in-africa
 Imen Khemakhem – YSMCHN – Policy Analysis -- 2022

References:

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Blackwill, R. D., Harris, J., & Harris, J. M. (2016). War by other means. In War by Other Means.
Harvard University Press.

Carmody, P. R., & Owusu, F. Y. (2007). Competing hegemons? Chinese versus American geo-
economic strategies in Africa. Political Geography, 26(5), 504-524.

Cohen, H. J. (2020). US policy toward Africa: Eight decades of Realpolitik. Boulder, CO, and
London: Lynne Rienner Publishers.

Ikenberry, G. John (2018). “The end of liberal international order?” International Affairs 98(1),
January 2018, pp. 7-23

Le Pere, G. L. (2021). US-China Geoeconomic Tensions: Implications for the African

Continental Free Trade Area. Asian Perspective, 45(1), 147-156.

Mensah, C. (2010). Chinas foray into Africa: Ideational underpinnings and geoeconomic
interests. African Journal of Political Science and International Relations, 4(3), 096-108.

Mohan, G. (2015). Queuing up for Africa: The geoeconomics of Africa’s growth and the politics
of African agency. International Development Planning Review, 37(1).

Morgan, P. (2019). Can China’s economic statecraft win soft power in Africa? Unpacking trade,
investment and aid. Journal of Chinese Political Science, 24(3), 387-409.

Power, M., & Mohan, G. (2010). Towards a critical geopolitics of China's engagement with
African development. Geopolitics, 15(3), 462-495.

Qobo, M., & Le Pere, G. (2019). China and US Geoeconomic Tussle and Implications for
Africa. China and the World, 2(03), 1950014.

Scholvin, S., & Wigell, M. (2018). Power politics by economic means: Geoeconomics as an
analytical approach and foreign policy practice. Comparative Strategy, 37(1), 73-84.
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Schweller, Randall (2018). “Opposite but compatible nationalisms: A neoclassical realist

approach to the future of US-China relations.” The Chinese Journal of International Politics,
2018, pp. 23-48

Wigell, M., Scholvin, S., & Aaltola, M. (2018). Geo-economics and power politics in the 21st
century. New York: Routledge.

Yin, J. The Beijing Consensus and African Autonomy (2020), Yale Review of International
Studies, http://yris.yira.org/