Ahead of the “Forum on China-Africa Cooperation (FOCAC)” 2024: How to Deal with China in Africa?
Megatrends spotlight 37, 02.09.2024In the run-up to the Forum on China-Africa Cooperation (FOCAC) 2024, many eyes are on China's growing influence in Africa. “What is the European dilemma in dealing with China in Africa?” asks Karoline Eickhoff in this Spotlight, which offers suggestions for dealing with competitive dynamics.
Third China-Africa Economic and Trade Expo, themed "Common Development for a Shared Future". Visitors walk past the exhibition hall of the China-Africa Achievement Exhibition on High-Level Building of the Belt and Road Initiative, Changsha (China), June 2023.
© picture alliance / Xinhua News Agency | Chen Yehua
This week, many eyes in European capitals and embassies in Africa are on Beijing. From 3 to 8 September 2024, Chinese state representatives will once again meet with African leaders at the Forum on China-Africa Cooperation (FOCAC). FOCAC is China's most important platform for cooperation with African states.
Against the backdrop of rising geopolitical tensions in the world, much political attention is on China's announcements on the international stage. China's importance as Africa's largest bilateral trading partner and as a major source of investment is undisputed. More than any other international actor, China is changing the environment in which African and European actors work together.
However, opinions differ as to what, if any, strategic consequences this will have for the EU and its Member States in their cooperation with Africa. On the one hand, Europe and Africa have very different interests regarding China. On the other hand, the causal link between China's growing influence and the changing dynamics of EU-Africa cooperation is not always clear.
The EU is currently experiencing a "geoeconomic turn" that is affecting all areas of European external relations. Economic policy instruments are gaining importance. Since 2019, the Union has increasingly sought to pursue its own geopolitical interests, as emphasized by the EU's High Representative for Foreign Affairs and Security Policy, Josep Borrell. Depending on the situation, the People's Republic is seen as a cooperation partner, an economic competitor, or a systemic rival.
Most political attention is currently on China as an economic competitor. A potential trade conflict between the EU and China is looming over the relationship. De-risking measures aimed at reducing Europe's import dependence are straining relations with Beijing. These competitive dynamics are also affecting EU-Africa relations. The EU wants to intensify cooperation with African countries, especially in the areas of renewable energies and mineral resources, where China is also very active.
In recent German strategy papers, the desire for greater competitiveness can be read between the lines. For example, the German government's China strategy, adopted in 2023, refers to the extraordinary importance of the EU for Africa as its largest trading partner. "At the same time, China is very active in Africa and is increasingly gaining influence," the strategy states, before pointing out that the neighbouring continent is a key target region for European infrastructure financing. The German Federal Ministry for Economic Cooperation and Development’s (BMZ) Africa strategy, published the same year, was developed in light of global challenges, including "China's growing influence in Africa", said German Development Minister Svenja Schulze in her foreword to the strategy. Hopes are high that the EU Global Gateway will provide a solution.
Competition with China is built into the EU's Global Gateway initiative. The investment package adopted in 2021, which – like China's Belt and Road Initiative (BRI) – focuses on transregional connectivity and infrastructure and is widely seen as the EU's counteroffer to African countries. Ursula von der Leyen, President of the European Commission, emphasized that it does not make sense for the EU to build a perfect road between a copper mine and a port if both are owned by China. EU investment should follow a win-win principle, serving European and African interests – but not China's.
Since then, one of the key concerns among political actors in European countries has been whether this instrument is suitable for making the EU competitive, especially in Africa. Ambitions are high. The Global Gateway is supposed to represent Europe's "positive offer" promoting high standards, transparency, and sustainable financing models. Criticism of Chinese infrastructure financing models and their association with the risk of debt distress in some African states clearly resonates.
So far, however, there have been no tangible successes. The EU and its Member States find it difficult to offer Africa outstanding products or particularly favourable prices. Material competition with China is costly and gives the impression of imitation, especially in the area of infrastructure development. Moreover, Beijing has already launched a new global, more multilateral development initiative, the Global Development Initiative, which complements the infrastructure-oriented BRI.
This dilemma for the EU is compounded by the fact that Europe and Africa have different interests in dealing with China. For most African countries, there is no "China problem". Rather, they see cooperation with the People's Republic as an important key to solving (mainly economic) problems. From an African perspective, competition is good for business. The dismantling of the privileged economic and political access still enjoyed by some former colonial powers tends to be welcomed. Diplomatic attempts to convince African actors that cooperation with China is not in their best interest runs the risk of being perceived as manipulation.
The current focus on China as an economic competitor in Africa seems to be based on the assumption that there is a direct causal link between Beijing's growing influence and the (partly real, partly diffusely perceived) loss of importance of European actors. "If we don't do it, China will" is a common refrain in political debates on EU-Africa relations. However, the link between the decision of African and European actors to be for or against cooperation and the availability of Chinese offers is rarely so clear. A breakdown of the intensity of competition by sector/policy area can help distinguish between political rhetoric highlighting global power shifts and actual changes in the environment of EU-Africa relations.
According to some experts, the investment needs in Africa are generally so high that the EU, China, and other external actors can be active in the same areas without getting in each other's way (or even cooperating, which is not a preferred foreign policy option in the current global political context). Just because China is an important trading partner does not mean that the government is less interested in European investment – see, for example, Kenya.
Even in the infrastructure sector – where BRI investment has given Chinese companies a strong boost – competitive pressure is only one aspect that influences European companies’ decisions for or against projects in African markets. Other factors, such as political stability, legal certainty, and own standards, often play a more decisive role than the intensity of competition. Approaches that focus primarily on how one's own products (whether political or entrepreneurial in nature) perform in direct comparison to the competition risk losing sight of these equally important changes in the environment, including demand.
How can the EU and its Member States differentiate themselves if they cannot offer an excellent product, a particularly low price, or fast delivery? In these circumstances, there is a strong business case for focusing on "customer orientation", such as putting demand at the centre of strategic considerations.
Focusing on the priorities of African countries should not be seen as an end in itself derived from development policy principles. Rather, it is a promising strategy to generate a competitive advantage aimed at improving the long-term prospect for cooperation – economically and politically. To this end, it is important to demonstrate a stronger customer orientation than that of the competition. Despite the EU's commitment to a change in perspective towards equal relations with Africa, there is still a lot of room for improvement in this respect, also with regard to the Global Gateway.
Key concerns of African countries, such as better integration into global value chains, correcting the distribution of vaccines during pandemics, reforms in agricultural trade, better credit conditions, debt rescheduling in cases of hardship, and stronger representation of Africa in multilateral organisations can play a key role here. European actors should now make strategic decisions on the areas where they can act as credible and visible first movers – not in the sense of innovation (proposals for such measures have in most cases been on the table for some time), but in the literal sense of who moves first.
European actors can improve their reputation in the eyes of African actors by "going the extra mile", namely by accommodating Africa on substantive issues that are connected to costs and where changes are not easily reversible. This is perhaps most feasible at present in the area of climate finance ("loss and damage"), where substantial resources can be mobilized and the "pie can be expanded".
However, the window of opportunity to generate competitive advantage through such approaches is closing already. Beijing is also focusing increasingly on economic and political cooperation with the Global South, not least in view of US and European de-risking measures. Announcements to this effect are expected this week at FOCAC.
Dr Karoline Eickhoff is a researcher in the project Megatrends Afrika and in the research division Africa and Middle East at the German Institute for International and Security Affairs (SWP).
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