In the recent past, I have been observing the changing economic trends in Africa with great concentration on how African countries have been trading with international nations. The trend has been rapidly changing with a great shift from Europe to the Asian continent. The European countries have always held the greatest share of the Africa’s imports and foreign direct investments. Additionally, a significant percentage of the African countries’ grants and external debt is accounted to European countries. The major trade partners are United States, United Kingdom and Germany. However, the latest invasion of African resources by China is a concerning trend that United States and United Kingdom economic experts have expressed worry.
One of the major strategies that the experts have cited as a comparative advantage to china in Africa is its foreign policy especially towards Africa. The other issue is the country’s low cost of resources that have positively influenced the African countries’ budget on external sources of debt to fund infrastructure. China’s policy has been characterized by a multipolar identity and non-partisan issue. Their political stance has been impartial and mostly has desisted from engaging in the internal affairs of any nation.
In an open economy, earnings from foreign investments and exports are the greatest contributors of a country’s sustainability to pay for its external debt and stabilize foreign exchange fluctuations. China’s imports have significantly grown especially in petroleum oil that accounted for about 18% of its total oil imports. Moreover, Republic China has invested most of its Foreign Direct Investment Fund (FDI) in the oil sector areas such as Niger, Angola, Sudan and Egypt (Gamache) The trend portrays China’s seizure of African opportunities in exploiting the available resources at low cost for mutual benefit. Recently, the US senate and economic strategists have noted with concern the bilateral agreement between China, Kenya and South Africa. US, UK and Germany are Kenya’s greatest trade partners and donors. Therefore, such an abrupt shift to the East prompted the strategist to advise the Governments to revise their foreign policy and trade relations with African nations before they are economically overwhelmed by China.
Another factor that supports my argument is the China’s pledge to write off some of the bilateral trade debts among most of the African countries. In the past fifteen years, the Republic of China has cancelled debts of about 31 African countries (Tull, 463). The gesture has won the hearts of many African leaders who have been shifting their economic and trade allegiance to the east at the expense of European nations. In addition, Foreign aid assistance budget in China to Africa accounted for approximately 44%, an indication that its foreign policy was more of economic oriented than political partisanship (Tull, 463). Despite all these gains, African citizens may be subconscious of the extent to which they may be exploited by China’s strategy to participate in African investments and carry their own labor force. As a result, the African countries may not be able to solve their involuntary unemployment rate that has continuously escalated in the last 10years.
Conclusively, the western nations should strategize their foreign policy in order to mitigate China’s rate of invading in their economic hub. My opinion may be trivial, but I believe the concerns raised may enlighten the Europe continent that their dominance in Africa may be at threat, and thus its future is uncertain.
Gamache, Lauren, Alexender Hammer, and Lin Jones. China's Trade and Investment Relationship with Africa. USITC, 2013. Web. 15 June 2014.
Tull, Denis M. "China's engagement in Africa : scope, signi¢cance and consequences." Journal of Modern African studies 44.3 (2006): n. pag. Print.