Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: World leaders a meeting at the UN in New York.
Speaker 2: But in the diplomacy battle, is China making inroads in Africa?
Speaker 3: We Chinese believe the African economy has a very bad future.
Speaker 3: We not regard Africa just as a destination for charity.
Speaker 3: We want to be economic partner for all African countries
Speaker 3: and to grow with you. That also means we can
Speaker 3: benefit from the partnership with Africa.
Speaker 2: As Washington steps back, Beijing is stepping in. But what
Speaker 2: are African nations getting from the deal?
Speaker 4: If we are to realize the sustainable future for our
Speaker 4: beloved continent, Africa and China, and indeed the entire will,
Speaker 4: we must acknowledge the reality of the interdependence amongst our
Speaker 4: community of nations.
Speaker 2: On today's episode of The Next Africa Podcast, we'll look
Speaker 2: at China's relationship with Africa and what a change in
Speaker 2: global order means for African investment. I'm t you Adabayo,
Speaker 2: and this is the Next Africa Podcast, bringing you one
Speaker 2: story each week from the continent driving the future of
Speaker 2: global growth with the context only Bloomberg can provide. While
Speaker 2: Jennifer is away at the UN General Assembly. I'm looking
Speaker 2: after the show this week and joining me to discuss
Speaker 2: China's growing interest in Africa is our Asia columnist Krishima
Speaker 2: of Aswani and our Africa economist Ivon Mango. Thanks both
Speaker 2: of you for joining me. Krishman, let's start with you.
Speaker 2: You've got a brilliant column up on the Bloomberg website
Speaker 2: at the moment where you've said that China's popularity in
Speaker 2: Africa is growing and that's kind of in stark contrast
Speaker 2: to the rest of the world.
Speaker 1: So why do you think that is?
Speaker 5: Yeah, Tia, you know, as part of my research into
Speaker 5: this topic, it was really interesting to look at the
Speaker 5: data that was coming out of this survey that was conducted.
Speaker 5: It's a series of surveys polls over a number of
Speaker 5: years that the Asia Society gathered and collated, and what
Speaker 5: it showed is that in parts of Africa, public opinion
Speaker 5: on China is more favorable than in many other parts
Speaker 5: of the world. And what was interesting to me about
Speaker 5: that it's not just like the elites or government officials.
Speaker 5: This popularity is actually across the board, shared among citizens
Speaker 5: and in sub Saharan Africa, in fact, the positive views
Speaker 5: of China outnumbered negatives roughly three to one, and a
Speaker 5: lot of that is because of the economic ties between
Speaker 5: China and the continent, and particularly when it comes to
Speaker 5: sort of concrete, tangible results like roads being built, highways, ports,
Speaker 5: but also the sort of softer side of that economic diplomacy,
Speaker 5: for instance, cultural exchanges and scholarships. China has been investing
Speaker 5: massively in all of that. But underpinning that desire by
Speaker 5: Beijing to build these closer relationships with Africa is obviously
Speaker 5: the massive amounts of critical minerals that are in Africa.
Speaker 5: Something like thirty percent of the world's critical minerals are there,
Speaker 5: and it's access to that that China is really after,
Speaker 5: and this kind of popularity really helps Beijing pave the
Speaker 5: way in order for it to have more of an
Speaker 5: influence in the continent and get more access to these minerals.
Speaker 2: Yeah, they're after minerals when it comes down to it,
Speaker 2: but tell me about what the relationship looks like in
Speaker 2: real time, maybe some of the sort of soft power
Speaker 2: elements to it. We mentioned the popularity. I've been reading
Speaker 2: recently that Nigeria has actually made steps to add Mandarin
Speaker 2: to the secondary school curriculum. Is that the sort of
Speaker 2: thing we're going to see more and more of as
Speaker 2: their popularity grows within the region.
Speaker 5: Yes, absolutely, and I think think you know, there's two
Speaker 5: reasons for that. One. It's not just simply about adding
Speaker 5: a language to the curriculum for young students to learn
Speaker 5: and to be able to sort of, you know, communicate
Speaker 5: in a business language that is becoming increasingly important around
Speaker 5: the world. It's also a reflection of the kinds of
Speaker 5: investments that China has made in Africa, particularly when it
Speaker 5: comes to infrastructure, but not just that in the mineral spaces.
Speaker 5: I was saying, across the continent, you've got newer and
Speaker 5: newer investments coming in. And I think what this shows
Speaker 5: when it comes to education is that it begins at
Speaker 5: the very sort of you know, early levels of that relationship.
Speaker 5: And what I've noticed in my research for this column
Speaker 5: in particular, it's not just about economic diplomacy. It's also
Speaker 5: about creating a sort of cultural legacy or you know,
Speaker 5: a new generation of leaders in fact, who are becoming
Speaker 5: more susceptible to the way that the Chinese economy is run.
Speaker 5: And it's a very alternative vision that is on offer
Speaker 5: here than from what has been offered by the West.
Speaker 5: And I think it's a really appealing vision, this idea
Speaker 5: that an economy can grow under what is effectively an
Speaker 5: authoritarian state, and that's you know, in some respects, a
Speaker 5: country that does not dole out massive amounts of sort
Speaker 5: of human rights lectures, but is willing to invest a
Speaker 5: lot in the country in terms of you know, actual money.
Speaker 5: I think is very appealing to a lot of leaders
Speaker 5: as well as people.
Speaker 2: Yeah, just on that point about cultural legacy, you know,
Speaker 2: because of history, it's something particularly sensitive on the African continent.
Speaker 2: Is there any pushback We've mentioned the popularity, but is
Speaker 2: there any pushback on this growing sense of presence that
Speaker 2: China is seeming to gain in Africa.
Speaker 5: I think there is pushback, and I think it's legitimate
Speaker 5: and I think it's sensible because along with this investment
Speaker 5: comes the concerns around debt diplomacy. You know, You've seen
Speaker 5: this in other parts of the world before, where China's
Speaker 5: Belt and Road initiative has made huge for rays places
Speaker 5: like Sri Lanka and Bangladesh, for instance, where there have
Speaker 5: been real concerns, genuine concerns about going into business with China. Now,
Speaker 5: the US has in the past talked about this and
Speaker 5: consistently waives the specter that if you end up doing
Speaker 5: a deal with China, the terms are not very good
Speaker 5: for you. And I think that's something that African nations
Speaker 5: need to look at really carefully. It shouldn't just be
Speaker 5: a case of where you have investment coming in and
Speaker 5: then Chinese workers come in to build that railway, so
Speaker 5: there's no trickle down effect or transfer of knowledge and
Speaker 5: transfer of skills, and instead what ends up happening as
Speaker 5: has been the case that's been documented by the IMF
Speaker 5: and the World Bank, of a number of African countries
Speaker 5: being in debt to China under unfavorable terms and conditions.
Speaker 5: That is a form of sort of economic colonialism, and
Speaker 5: I think that bodes really badly for the continent if
Speaker 5: that's the kind of relationship that continues in the future.
Speaker 2: Interesting you and here Yvon talk to me about the numbers.
Speaker 2: How big is China's investment in Africa.
Speaker 6: So, China's investment in Africa over the past say, fifteen
Speaker 6: years has been around eight billion dollars per annum. We
Speaker 6: saw an exceptional spike around twenty twelve of around fifteen billion,
Speaker 6: but generally it's been around the five to eight billion
Speaker 6: mark over the past say five years. What's been interesting
Speaker 6: is the sectors that FDI is going into, and that's
Speaker 6: what you find out. It dominates in the extractive industry,
Speaker 6: so it's mainly the extraction of crude oil gas, but
Speaker 6: also minerals. You're seeing an increasing focus of course in
Speaker 6: critical minerals, partaking countries like Zambia which produces copper, in
Speaker 6: the case of the Democratic Republic of Congo that produces
Speaker 6: cobalt and Barbwie for instance, that produces lithium. About half
Speaker 6: of that FDI is going into commodities. On minerals, only
Speaker 6: about twenty five percent ends up in low value manufacturing,
Speaker 6: and that's something I think Africa would like to see shift.
Speaker 6: That'd like to see more of that funding, including the
Speaker 6: debt that comes from China. When the China Africa Summit
Speaker 6: happened about a year ago in Beijing, one of the
Speaker 6: concerns was that China's trade surplus with Africa is growing,
Speaker 6: so basically that you're seeing the exports to the continent
Speaker 6: increase relative to what China is importing from Africa. So
Speaker 6: a shift in that or at least a reduction in
Speaker 6: that trade surplus is something that Africa is seeking to
Speaker 6: do and they're hoping that China can help them do
Speaker 6: that by investing more in the manufacturing sector so that
Speaker 6: Africa can also produce manufacturing products that it can sult
Speaker 6: to China, Asia and other markets.
Speaker 2: Okay, stay with me, krieshman Ivan. When we come back,
Speaker 2: we'll have a look at what the impact of the
Speaker 2: US tariffs could have on China's relationship with Africa.
Speaker 1: We'll be right back. Welcome back. Today.
Speaker 2: We're talking about China's growing popularity in Africa and how
Speaker 2: the relationship is growing at a time when Washington is
Speaker 2: stepping back. Karishma of Veswani and Ivon Mango are still
Speaker 2: with me. Before the break, we talked about Chinese investment,
Speaker 2: but China also sees Africa as a customer base. Ivon
Speaker 2: what is China exporting to Africa.
Speaker 6: It's mainly manufactured goods that's coming low value added manufactured
Speaker 6: goods that are of low cost compared to those from
Speaker 6: other regions. That's what we're seeing coming into the continent
Speaker 6: at very competitive prices, which is probably another reason why
Speaker 6: African countries are struggling to break into the manufacturing industry.
Speaker 2: Let's talk about tariffs here. Have they made it harder
Speaker 2: for China to export to the US. Is that having
Speaker 2: an impact on the amount of goods that are being
Speaker 2: sent to Africa?
Speaker 6: In terms of the response or the reaction of African
Speaker 6: countries to the tariffs, what you're seeing is that countries
Speaker 6: that have been hit hard by these US tariffs are
Speaker 6: seeking alternative markets for their products. South Africa has been
Speaker 6: sending delegations to Asia, in particular the Asian countries, seeking
Speaker 6: alternative markets. Of course, this is not going to happen overnight.
Speaker 6: It takes months, six month, years to establish new trade relationships.
Speaker 6: That will take time in terms of achieving and I
Speaker 6: guess China is also one of the markets they are
Speaker 6: looking at. But also keep in mind the US is
Speaker 6: a significant global consumer of imports. That is, it is
Speaker 6: South Africa's second biggest trade partner, So trying to find
Speaker 6: markets that can take up the share of exports from
Speaker 6: South Africa that we're being consumed by the US will
Speaker 6: take time.
Speaker 1: I'm interested.
Speaker 2: We've been talking about some of the countries that the
Speaker 2: hardest hit by tariffs, like South Africa is China then
Speaker 2: a winner of this tariff situation. Does it put some
Speaker 2: African countries that are hard hits in the position that
Speaker 2: they want in terms of looking to diversify into other markets,
Speaker 2: which could be China.
Speaker 1: Has this helped them.
Speaker 6: The two answers to that question. So the first one, yes,
Speaker 6: it helps China in that not just Africa, but I
Speaker 6: guess the rest of the world is now seeking alternative
Speaker 6: trade partners given the more inward US policies. So it
Speaker 6: does imply that countries globally, including from Africa, are more
Speaker 6: receptive to exploring trade relationships with other countries, including China.
Speaker 6: That's the upside and that's what we expect to happen.
Speaker 2: Chrishma, it seems like this relationship between Africa and China
Speaker 2: has ramped up recently.
Speaker 1: Is that true?
Speaker 2: And how does Africa see its relationship with China over
Speaker 2: the long term?
Speaker 5: Then?
Speaker 1: Is it likely to be a priority.
Speaker 5: I think it would be fair to say that it's
Speaker 5: ramped up recently because of the economic linkages and how
Speaker 5: attractive Africa's critical minerals have become to China in this
Speaker 5: race against the United States. You know, these minerals are
Speaker 5: really important for future industries, and I think that is
Speaker 5: one of the reasons why Beijing has been so keen
Speaker 5: to develop this relationship further with Africa. But I think
Speaker 5: it's also important to remember that it goes back a
Speaker 5: long way. In fact, you know, Chinas supported several of
Speaker 5: the African liberation movements during the Cold War, and again
Speaker 5: for similar reasons in the sense that it was partly
Speaker 5: to diminish the West's influence on the continent. And it's
Speaker 5: also hugely important for China to have these votes at
Speaker 5: the United Nations countries that support it and its position
Speaker 5: on things like Taiwan, for instance, and I think it
Speaker 5: sees Africa as a really reliable partner in that situation.
Speaker 5: Eswatini is the only African nation that actually has diplomatic
Speaker 5: relations with Taiwan, which of course Beijing claims as its
Speaker 5: own territory, and Sijinping Presidents Sigin Ping has talked about
Speaker 5: unification with Taiwan, either through peaceful means or by force.
Speaker 5: So having allies in Africa that can effectively become proxies
Speaker 5: for China's position at the United Nations is a hugely
Speaker 5: important diplomatic aspect of this relationship. In fact, I don't
Speaker 5: know how many people listening know this, but in nineteen
Speaker 5: seventy one it was African votes at the United Nations
Speaker 5: that helped Beijing displace Taiwan and claim China's seat on
Speaker 5: the Security Council. So I think, yes, it's true that
Speaker 5: the ties between the content and China have significantly upgraded,
Speaker 5: as we've heard from Yvonne, in terms of the actual
Speaker 5: investments that have gone in in the last few years.
Speaker 5: But this goes back a long way, and I think
Speaker 5: that's something people forget from time to time, that this
Speaker 5: is a relationship sometimes that it's based on ideology as well,
Speaker 5: and I think that's why it's stood the test of
Speaker 5: time and being so fruitful for both sides.
Speaker 2: Wow, so perhaps some age old partnership being renewed for
Speaker 2: the modern age. You might say, Krishna and Levon, thank
Speaker 2: you for joining me both today. And you can read
Speaker 2: Karrishma's report on Bloomberg platforms. Now we'll put a link
Speaker 2: in the show notes. Here's some other stories from the
Speaker 2: region we've been following this week. The world's cocoa crunch
Speaker 2: is finally showing signs of a turnaround, as better harvest
Speaker 2: in South America and waning demand put supplies on track
Speaker 2: for a back to back surplus. The improvement will help
Speaker 2: replenish global inventories that had been depleted following consecutive poor
Speaker 2: harvest in West Africa, a major growing region, and Botswana's
Speaker 2: president aims to complete a deal to take a majority
Speaker 2: stake into Beers by the end of next month, even
Speaker 2: as his administration and other potential buyers continue negotiations with
Speaker 2: the diamond company's controlling shareholder. Anglo American, is looking to
Speaker 2: divest its eighty five percent stake into Beers, which mines
Speaker 2: most of its gems in the southern African nation, as
Speaker 2: part of a restructuring process that began sixteen months ago.
Speaker 2: You can follow so these stories across Bloomberg, including the
Speaker 2: Next African Newsletter. Will put a link to that in
Speaker 2: the show notes. This program was produced by Adrian Bradley.
Speaker 2: Don't forget to follow and review the show wherever you
Speaker 2: usually get your podcasts.
Speaker 1: I'm tia Adebayo. Thank you for listening.