Will China’s African Trade-relations Better-equip China for the Trade War?

China’s Foreign Minister Wang Yi had been in Africa on a tour to four nations: Republic of Congo, Namibia, Chad and Nigeria. Purpose, as per reports, was to implement the outcomes of the Forum on China-Africa Cooperation Summit that took place in Beijing in September last year. Expansion and deepening of China’s trade ties with South African nations, mining in crucial items like Coal, Lithium, gas, petroleum, gold among other minerals, is in the list.

Wang Yi began his visits on January 5, 2025 (Sunday). This trip is taking place at a time when the U.S. is busy in the inauguration of President-elect Donald Trump and the West is engaged either in Russia-Ukraine conflict or internal political crisis. The U.S. and the West are major economic players in Africa, in terms of mining too. But the bloc, according to report, has minimized its investments in Africa. On the other hand, China has been consistently pursuing its investments in Africa, which is for over last three decades and more. According to China, Africa is ‘not a forgotten continent, but rather a source of vitality and a land of development potential,’as Chinese Foreign Ministry has put it. It shows the importance China attaches to its African trade relations.

In recent years, China’s economy at home has slowed down and is facing crisis on many fronts, and it is expected to continue for some time. Between 2000 to 2019, the gross domestic product (GDP) grew at nine per cent a year, which today has dropped to well below five per cent. The real estate is in disarray. Millions of unsold apartments can be found in every city as good employment opportunity and job security has dwindled. Real estate developers have been driven to bankruptcy. The balance-sheet of banks that financed the real estate developers has been running into crisis. On the political front, China has disputes with Taiwan and with Philippines in South China Sea. With its neighbour India too, it has border disputes and the two powerful nations of South Asia are on suspicion terms with one another. However, China’s trade relations with India are profitable for it, in that, in 2023-24, China-India bilateral trade reached $118 billion. China had been India’s largest trading partner. India has been proving a good and favourable market for Chinese good. In 2023, however, India’s trade deficit with China declined to $47.04 billion, down from $67.08 billion in 2022. India’s imports from China too decreased, and India’s exports to China increased in 2024, and stood at 16.67 billion; while India's imports from China in 2024 stood around $102 billion.

In the race to become the richest economy of the world, China has expanded its trade relations and investments with many nations across the Globe, Latin American nations being in focus.

China facilitated a summit of China-African Cooperation in Beijing in September last year. China is willing to make more investment in African countries albeit African countries offer it better access to raw materials. According to reports, the visit of Wang Yi is focusing on implementation of the outcomes of the Forum on China-Africa Cooperation Summit that took place in September last year. The theme of the Summit was: “Joining Hands to Advance Modernisation and Build a High-Level China-Africa Community with a Shared Future”. China-Africa Cooperation is an important tool for China to stay on in economic competition with super-powers, apart from its facilitating China in expanding itself in Africa. As an outcome of the Summit, China has agreed to make a grant of 360 billion yuan ($50.70 billion) to African nations. Chinese companies will spend 70 billion in new investments, around 210 billion would be through credit lines, and the other smaller amounts through various segments including military aids. Chinese President Xi Jinping has already termed China-Africa relations as “best period in history”. China today has a strategic partnership with more than 30 nations in Africa. China has waved tariff of 33 African countries. Aim of modernisation of African nations is another outcome of the Summit and China plans to push modernisation as an “inalienable right of any nation” in African countries.

China is already in trade competition with the U.S. and the President-elect Donald Trump, to be in office from January 20, has made his “America First” policy clear. He has already announced to impose tariff upto 60 per cent on imports from China, which indicates severe trade competition between the two economic superpowers after January 20, until there is any change of mind in the U.S. policy, which is very unlikely. Besides, given the aggressive push of China to become the most powerful economy of the world, Trump’s stated policy vis-à-vis China is obvious. In 2023, Africa-China trade stood at 282 billion USD. On the other hand, the U.S. in the first nine months upto September 2024, imported Chinese goods worth $322.17; and had exported goods worth $11.3 billion to China. The U.S. wants to address this trade deficit as President-elect Trump has clearly stated.

China clearly aims at natural resources in Africa and might looking up to Africa to equip it with more resources to meet the U.S. and the West firmly in the trade war. At present, China’s main concentration in mining is in Guinea, South Africa, Zambia, Zimbabwe, and Congo. China-Africa trade relations may see a new phase of economy in Africa, but its primary aim appears to be principally empowering China at the global economy level. And the new step of China vis-à-vis African nations may move the U.S. and the West to revive their trade stands vis-à-vis Africa. Africa, thus, might well prove to be an economic power-play ground for two the blocs. President Trump’s inauguration is eagerly waited for a full-fledged unfolding of the trade events. At present, Chinese mining presence in Africa is much lower than Western presence.