Why China matters to Africa: partnership, investment and trade?

This research paper examines the expanding diplomatic and economic relationship between China and Africa, highlighting a shift from aid-driven engagement to a commercial partnership dominated by trade and investment. While noting the potential for African economic growth and infrastructure development, the document also addresses concerns regarding debt sustainability, the impact of cheap imports on local industries, and the lack of transparency in Chinese lending.

• Sino-African trade experienced explosive growth between 1999 and 2007, increasing from $2 billion to $39.7 billion. China set an ambitious target to raise this trade volume to US$100 billion by 2010.
• The economic relationship has shifted such that commercial activities—including trade and investment—now dominate over official development assistance (ODA). For example, the ratio of aid flows relative to trade dropped from approximately 20 percent in the early 1990s to 3–4 percent in 2004–05.
• Trade composition reflects the comparative advantages of both partners: over 60 percent of Africa's exports to China in 2006 were oil and gas, while three-fourths of Africa's imports from China consisted of machinery, transport equipment, and manufactured products.
• China provides significant infrastructure financing through the Export-Import Bank of China (China Exim Bank), often using resource-backed loans. A specific example is a $2 billion credit line for Angola to reconstruct infrastructure in exchange for 10,000 barrels of oil per day.
• There are significant concerns regarding the impact of Chinese engagement on African development, including the risk of 'white elephant projects' due to unconditional credits, a lack of financial transparency, and the displacement of local industries by cheap Chinese imports, particularly in textiles and steel.
• China has engaged in debt relief for African nations, writing off 10.5 billion Yuan ($1.3 billion) in overdue obligations between 2000–02 and announcing the cancellation of another 10 billion Yuan in debt for 33 heavily indebted and least developed African countries in 2006.

APA

Mathale, V. (n.d.). Why China matters to Africa: partnership, investment and trade? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2008/05/chap_con_china_and_africa_paper_20080605.pdf

Chicago

Mathale, Victor. Why China matters to Africa: partnership, investment and trade? South African Institute of International Affairs, n.d. https://saiia.org.za/wp-content/uploads/2008/05/chap_con_china_and_africa_paper_20080605.pdf.

Wikipedia

{{cite report |last1=Mathale |first1=Victor |title=Why China matters to Africa: partnership, investment and trade? |publisher=South African Institute of International Affairs |url=https://saiia.org.za/wp-content/uploads/2008/05/chap_con_china_and_africa_paper_20080605.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mathalendwhy, author = {Mathale, Victor}, title = {{Why China matters to Africa: partnership, investment and trade?}}, institution = {South African Institute of International Affairs}, url = {https://saiia.org.za/wp-content/uploads/2008/05/chap_con_china_and_africa_paper_20080605.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }