US President Barack Obama earlier this year hosted the first ever US-Africa summit. The event confirmed a renewed push by developed economies to cement ties with Africa, with Europe holding its own regional gathering and Japan’s prime minister travelling to sub-Saharan Africa for the first time in nearly 10 years.
Left unsaid in public was that Washington, Brussels and Tokyo were all aiming to fight back against China’s growing commercial influence in Africa, the second-fastest growing region in the world. Did Mr Obama and his counterparts succeed? In short, no.
At the inaugural FT Africa summit this week, the chief executives of six companies with huge operations on the continent – ranging from banking to telecoms to commodities and consumer goods – were asked which foreign power was playing its cards best in Africa. The unanimous answer: China is still winning, and big.
“China is doing a fantastic job because they are coming with patient capital and [a] long-term vision,” said Vimal Shah, chief executive of Nairobi-based consumer group Bidco. He added: “They are not trying to dictate to you how to run your country”.
Ivan Glasenberg, the South African chief executive of commodities company Glencore, highlighted Beijing’s role in building roads, ports and power stations: “China is investing big in Africa . . . and they are doing a lot in infrastructure.”
Herbert Wigwe, the head of Nigeria’s Access Bank, echoed the consensus view when he observed: “I have gone to almost every country in Africa – at least to 50. The Chinese influence is growing by the day and they are getting it right.”
That China is still ahead in Africa is, perhaps, not surprising. Chinese trade with the region has grown from less than $10bn in 2000 to more than $200bn last year, overtaking the US and the colonial European powers. Cheap credit lines have continued to flow, and Beijing has also maintained its policy of political non-interference.
But what is perplexing is that others have not been able to at least close the gap, especially after Beijing came under criticism inside and outside Africa this year for its “cheque book” policy. This refers to its practice of lending money to African countries to largely benefit its own construction groups, which have built everything from roads to hospitals on the continent.
China, however, appears to have outsmarted its rivals in recent months by taking steps – some symbolic and some real – to placate its African critics.
Chinese officials have, for example, acknowledged some mistakes. In one of the most candid mea culpas, Zhou Xiaochuan, governor of China’s central bank, admitted during a meeting of African finance ministers and central bank governors that some Sino-African deals had been “not so good, not so satisfactory”.
And Li Keqiang, China’s premier, acknowledged during his first trip to the continent earlier this year that the relationship between Beijing and Africa had suffered “growing pains”. Such comments were music to the ears of disenchanted African officials.
China has begun to address the larger criticism: that it is only interested in Africa’s commodities and only lends money to infrastructure projects that benefit its own construction companies.
As the criticism mounted – and the demand for commodities cooled– Beijing promised to encourage investments in other African sectors, particularly manufacturing and banking. Said and done: First Automotive Works, one of China’s largest car parts companies, opened a plant this year in South Africa; shoe producers have set up shop in Ethiopia; and Kenyan banks are building relationships with China’s state-owned financial institutions.
China has also taken a baby step away from its “cheque book” policy of multibillion-dollar bilateral deals. In May, it created a $2bn fund in partnership with the African Development Bank and announced that it would open the resulting contracts to the most suitable bidder – not just Chinese companies.
Even if some of these measures are largely symbolic, they appear to have succeeded at quieting the critics, allowing Beijing to return the focus to its unmatched financial firepower. Little wonder, then, that Africa Inc still is in love with China – despite the overtures from Mr Obama and others.
Letter in response to this column:
Get alerts on Emerging markets when a new story is published