China’s African Gambit: Investment or Entrapment

African leaders and Chinese President Xi Jinping, center, at the Forum on China-Africa Cooperation on Sep. 5, 2024. (Photo: Stiftung Wissenschaft und Politik) 

China’s investments in poorer countries have long been subject to critique, many of which increasingly target Africa. The question is, are these loans beneficial or hurtful to the nations? 

From 2000-2024, China has lent over 182 billion USD to 49 African countries. China is both the largest provider of foreign direct investment in Africa— doubling US Foreign investment in Africa in 2022—and the continent’s largest two-way trading partner, beating US-Africa trade fourfold in 2021. 

China has been politically and economically involved with Africa for a long time. During the Cold War, China supported the African liberation movement, and, in 1999, China implemented the “Go Out” policy, incentivizing Chinese enterprises to invest globally and enlarging Chinese presence in Africa. 

In 2000, China started the Forum for Chinese-Africa Cooperation, enhancing strategic and economic standing in the continent.  The forum remains active—the last summit was held in Beijing in September 2024.

 In 2013, President Xi Jinping launched the Belt and Road Initiative, encouraging China’s banks to fund numerous projects in Africa with the goal of creating better trade network routes with China and the world. 

Theoretically, this initiative should have helped urbanize African cities, create jobs, increase economic development, and better trade. However, this positive rhetoric falls short in reality. Railway projects in Uganda failed, and the only thing that grew were the participating nation’s debt. On the other hand, in Kenya, Chinese infrastructure investments with the Standard Gauge Railway have created easier transportation across the country for over 10 million people since 2017. 

Furthermore, investments in the tech industry have also helped Kenya’s digital economy grow. However, the help is limited—many worry about the potential burdening debt it will create for Kenya. Prompting speculations of China’s “Debt-Trap” policies. Concerns over whether China purposefully provides easy loans to nations with concealed clauses on funding. In more than one scenario, countries unable to repay the debt and defaults are forced to surrender assets to China, thus increasing their influence over the economy. 

A study published in “Scientific Africa” explains, “rapid accumulation of debt by African countries also raises concerns about the attainment of Africa's Agenda 2063 – a continental and strategic development framework that envisions Africa as a dominating actor in the global economic arena”. 

In addition, researchers of “debt overhang” question the sustainability of Chinese loans, citing that historically, the countries involved are deep in debt and struggling economically. 

Furthermore, many fear that Africa will eventually become dependent on China. The same study published in “Scientific Africa” explains that according to the Dependence Theory, historical trends show patterns of China exploiting resources in Africa and providing loan conditions difficult to repay, creating a lasting reliance on China and an enduring tie to China’s economy and politics. 

Sign reading “Friendship between Zambia and China” in both English and Mandarin hanging in Zambia, a nation that has defaulted on its debt repayments to China. (Photo: Open Zambia)

Still, Chinese economic relations with Africa, including trade relations, are positive in many cases. China is the many African countries’ number one trade partner. Huawei, a Chinese tech company, has built 70% of Africa’s tech structure, aiding in the continent’s development. Some scholars have found that Chinese loans spur African economic growth, specifically identified in connections between infrastructure development and economic growth. Many supporters of Chinese lending to Africa assert that Chinese loans are better for African nations because of the fewer “strings” attached, including regulations that come with Western loans. 

In fact, The United States Institute of Peace explains that African nations, remembering when they were used as puppets between the Soviet Union and United States during the Cold War, fear the political implications of ‘picking sides’. An example of this more recently was when the United States pressured African nations to condemn Russia at the United Nations. Contrastingly, China operates following a “Non-Interference Policy”, creating the image that China is involved economically, but not imposing political or moral will onto African nations. 

President Xi Jinping capitalized on this, stating in his keynote address at the September 2024 Beijing Summit of The Forum on China-Africa Cooperation, “Modernization is an inalienable right of all countries. But the Western approach to it has inflicted immense sufferings on developing countries. Since the end of World War II, Third World nations, represented by China and African countries, have achieved independence and development one after another, and have been endeavoring to redress the historical injustices of the modernization process”. With this, Xi Jinping builds a narrative, and a powerful one, of an imposing all-powerful Western alliance, and the underdog Chinese and African coalition. In his speech, Xi Jinping continues with six main goals, each starting with the words “we should jointly advance modernization”. Again, the rhetoric is clear. Rather than the imposing Western nations, China positions itself as a similar friend, a strategic economic partner who is there to lift African nations up as they lift up China, together. This rhetoric creates a clear “us” and “them”. 

So, what is it? Are the loans good or bad for African nations? Is China using rhetoric to demonize the West and gain the economic value of Africa? Or does the rhetoric actually go the other way around?  It seems there is no black and white answer. At this point, the United States and other Western nations have not provided viable alternatives to China’s loans. And there is evidence to support both positive and negative effects of China’s loans. Ultimately, many argue that the decision must be made by each African nation. The question of what is good or bad for “them” takes the agency away from African nation leaders themselves, it is again a narrative of imposing will. Perhaps the need to define Chinese loans as bad and thus, the need to help African countries avoid them is a remnant of white saviorism ideals and rhetoric. Ultimately, African nation leaders and policy experts of each nation must make the decision, knowing the benefits and risks, of what extent of Chinese loans to accept.