China-Africa relations: Beijing says it will help pay for world's largest free-trade zone

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China-Africa relations: Beijing says it will help pay for world's largest free-trade zone

Posted : 2020-11-14 11:09

Updated : 2020-11-14 20:28

A handout photo made available by Russian Foreign Affairs Ministry shows Chinese Foreign Minister Wang Yi during a joint news conference with Russian Foreign Minister Sergei Lavrov following their talks in Moscow, Russia, 11 September 2020. EPA-Yonhap

China has announced that it will help to finance the development of an Africa-wide free-trade area, which on completion will be the world's largest, spanning 55 nations with a combined GDP of US$3.4 trillion and about 1.3 billion consumers.

Speaking at an event to mark the 20th anniversary of the Forum on China-Africa Cooperation (FOCAC), Thursday, Chinese Foreign Minister Wang Yi said Beijing welcomed the development of the African Continental Free-Trade Area (AfCFTA) and "will provide cash assistance and capacity-building training to its secretariat."

China would also continue to invest in infrastructure and industrial projects in Africa via its Belt and Road Initiative, and open up its market of 1.4 billion consumers to African products, he told the more than 150 guests, including several African ambassadors to China, who attended the event in Beijing.

China and Africa needed to deepen free-trade cooperation and improve the connectivity of industrial and supply chains so that "Africa can better access the vast China market and join the international economic circulation," Wang said.

The free-trade area, which has its headquarters in the Ghanaian capital Accra, is expected to come into effect next year, after being delayed by the COVID-19 pandemic. All but one of the 55 members of the African Union ― Eritrea ― have signed the deal, while 30 have also ratified it.

David Shinn, a professor at George Washington University's Elliott School of International Affairs and a former American diplomat, said China's apparent commitment to the AfCFTA was a positive development, but the devil was in the details.

"What exactly will China offer to support AfCFTA and how does it compare to what other countries may provide?" he said.

While China's foreign direct investment (FDI) in Africa was both important and growing, it was still relatively modest, Shinn noted.

"China's total FDI stock in Africa pales in comparison to that of the European Union and is even less than the investment stock of the United States," he said.

Chinese FDI in Africa was US$49.1 billion last year, according to Wang.

The country is, however, Africa's largest trading partner, with two-way trade hitting US$208.7 billion in 2019, according to official figures from Beijing.

Chinese firms have also built dozens of economic cooperation zones and industrial estates across Africa, Wang said.

Since the creation of the FOCAC, China had helped build and finance more than 6,000km (3,700 miles) of railways, a similar amount of roads, nearly 20 ports, more than 80 large-scale power plants, 130-plus medical facilities, 45 stadiums and about 170 schools, Wang said.

Beijing is also funding the construction of the new Africa Centres for Disease Control and Prevention headquarters in Addis Ababa, Ethiopia.

According to figures from the China Africa Research Initiative at the Johns Hopkins School of Advanced International Studies in Washington, Beijing advanced US$148 billion worth of loans to Africa between 2000 and 2018.

At the 2018 FOCAC summit, Chinese President Xi Jinping pledged US$60 billion in financial aid and loans to the continent. But since then, Beijing has come under heavy fire from the United States and several European countries that have accused it of engaging in "debt trap diplomacy."