A Trilateral Dialogue on the United States, Africa and China

On May 13, 2013, the Africa Growth Initiative and the John L. Thornton China Center at Brookings, with the Institute for Statistical, Social and Economic Research at the University of Ghana and the Chinese Academy of Social Sciences in Beijing, hosted a private roundtable, followed by a public event, to examine the potential for a trilateral relationship between the United States, China and African states.  This forum was intended to be the first in a series that will bring a balanced perspective to the examination of the challenges and opportunities for trilateral dialogue and action.

Highlights

  • China’s aid to Africa has generated effective results and contributed greatly to Africa’s economic recovery. China’s demand for raw materials is partly responsible for Africa’s annual growth rates of 5-6 percent in the last decade.
  • The United States has long critiqued Chinese partnerships and business practices in Africa, fearing that differing approaches to transparency and international standards for commerce and trade damage U.S. development initiatives and diminish its role in the region.
  • China in particular might be reluctant to pursue an active trilateral strategy given that its foreign policy is predicated on non-interference and that it sees itself as a “developing country,” similar to many in Africa.
  • There are several countries in Africa that are without either democratically elected governments or are experiencing political instability and weak institutions. These situations are of enormous concern to most African leaders and should also be the same to the United States and China because of their vested interests in Africa’s natural resources.

According to the African Development Bank, the number of middle class Africans has tripled over the last 30 years.  An increase in discretionary spending is expected to increase consumer spending, which is estimated to reach $1.4 trillion by 2020.  China is working to meet the African consumer demand for goods and recently surpassed the U.S. as the leading trading partner to sub-Saharan Africa.  In addition to a rising middle class, the region contains seven of the projected fastest growing economies for 2011-2015 as well as new oil and gas discoveries that make it more attractive for investment.

Despite a somewhat competitive stance from the U.S. on China’s actions in sub-Saharan Africa, the U.S., China and Africa have the potential to benefit from unified engagement in the areas of security, trade, investment and natural resource management.

The growing importance of the sub-Saharan Africa region to the global economy has brought the region into focus for U.S. and Chinese engagement.  China recently pledged significant financing to Africa over a three-year period from 2012 to 2014, while the Obama administration has leveraged the public and private sectors to focus on Trade Africa, Power Africa and the reauthorization of AGOA to deepen the U.S. presence in the region.  Despite a somewhat competitive stance from the U.S. on China’s actions in sub-Saharan Africa, the U.S., China and Africa have the potential to benefit from unified engagement in the areas of security, trade, investment and natural resource management. 

In preparation for the roundtable, discussion papers focusing on several key areas were commissioned from each of the three host institutions.  Each paper was followed by two responses from the other institutions.  The papers cover the following major themes:

  • China’s arrival as a major diplomatic and economic player on the African continent, providing an alternative to development assistance provided by the Organization for Economic Cooperation and Development (OECD) countries (including the U.S.);
  • Trilateral trade and investment trends, as well as opportunities for both Chinese and American firms to offer specific technical expertise and contribute to economic advancement on the continent;
  • Opportunities for and challenges faced by Chinese and American entities engaging in the African nonrenewable resource sector (particularly in Ghana);
  • Competing perspectives on Chinese-African oil ties—whether or not these ties are beneficial, China must be willing and able to tailor its policies to adjust to shifting realities

The conference papers and the critical responses to them can be found below.


New Actors in International Development: The Case of China in Africa
Dr. He Wenping
Professor and Director of African Studies, Chinese Academy of Social Sciences

He Wenping of the Chinese Academy of Social Sciences reviews China’s history as a donor to Africa as well as the characteristics of Chinese aid.  She discusses current trends and roles for Chinese diplomatic engagement, trade and investment, and overall development assistance since the first Forum on China-Africa Cooperation in 2001.  She concludes with a review of both challenges and opportunities faced by China and other emerging countries as alternative funding sources to Africa, separate from the Organization for Economic Cooperation and Development (OECD) countries. 

 Read Conference Paper One » (PDF)


The Commercial Relationship between the United States, China and African Countries: Areas for Trilateral Cooperation
Witney Schneidman
Nonresident Fellow, Africa Growth Initiative, Brookings Institution

Andrew Westbury
Assistant Director, Africa Growth Initiative, Brookings Institution

Witney Schniedman and Andrew Westbury of the Africa Growth Initiative at the Brookings Institution provide an overview of current trends in trade and investment for the U.S. and China in Africa.  While U.S. policymakers have expressed a desire to be more competitive with China in African markets, Chinese and American firms tend to operate in different sectors of the market and have different levels of technical expertise.  The authors posit that fostering regional integration, fighting corruption, hastening job creation and facilitating structural economic change are major opportunities for tripartite collaboration among Africa, the U.S. and China.

 Read Conference Paper Two » (PDF)


The Role of China and the U.S. in Managing Ghana’s Nonrenewable Natural Resources for Inclusive Development
Prof. Clement Ahiadeke
Director, Institute of Statistical, Social and Economic Research, University of Ghana, Legon

Prof. Peter Quartey
Associate Professor, Institute of Statistical, Social and Economic Research, Head, Department of Economics, University of Ghana, Legon

Dr. Simon Bawakyillenuo
Research Fellow, Institute of Statistical, Social and Economic Research, University of Ghana, Legon

Dr. Patricia Aidam
Research Fellow, Institute of Statistical, Social and Economic Research, University of Ghana, Legon

Mr. Mustapha Mensah
Teaching Assistant, Department of Economics, University of Ghana, Legon

Clement Adiaheke, Peter Quartey, Simon Bawakyillenuo, Patricia Aidam and Mustapha Mensah of the Institute of Statistical, Social and Economic Research at the University of Ghana, Legon examine the differences between American and Chinese approaches to engagement in Africa—and, more specifically, Ghana—in the nonrenewable resources sector.  The authors reveal that the interests of these two large countries in Ghana in particular have positive overall implications for creating competition and complementary economic relationships within the nonrenewable resource sector.  However, there are also challenges, including the proliferation of potentially destructive small-scale mining operations, imbalances between Chinese and African workers and the potential for Dutch Disease, stemming from an overreliance on investments in oil and minerals and leading to a neglect of other sectors.

 Read the Conference Paper Three » (PDF)


Perspectives on China-Africa Oil Ties
Luo Zhenxing
Institute of American Studies, Chinese Academy of Social Sciences

Luo Zhenxing considers some competing perspectives on Chinese-African oil ties and concludes that positive interpretations of this relationship are closer to reality.  To support this conclusion, he reviews some stylized facts about the global oil market to determine what can be inferred regarding the validity of each viewpoint and reveals that arguments for and against Chinese engagement in the African oil sector have both strengths and weaknesses.  However, China’s policies related to its oil ties in Africa may need adjustment to shifting global realities.

 Read the Conference Paper Four » (PDF)

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