Winston Mok

The View | China and Gulf states changing face of development finance in Africa

As major investors displacing the traditional Western powers, China and the GCC are precipitating a reconfiguration away from the North-South flow of development resources

Reading Time:3 minutes

Why you can trust SCMP

A high-schooler in Uganda learning Mandarin in school on September 29, 2019. Africa has yet to translate its huge and growing population into human capital. China is uniquely qualified to help. Photo: Shutterstock

Winston Mok

Published: 3:30pm, 9 Apr 2024Updated: 4:18pm, 9 Apr 2024

China has in recent years invested massively in Africa but Gulf Cooperation Council (GCC) states are also emerging as major investors; the United Arab Emirates (UAE), for instance, is becoming China’s key competitor for African port operations. Like China, the GCC can move much faster than Western countries. And when China’s pace of African investments slowed down, the Gulf states filled some of the gaps.

The rapidly evolving engagements of China and the GCC across Africa may catalyse a paradigm shift in international development cooperation. As major investors displacing the traditional Western powers in Africa, China and the GCC are precipitating a reconfiguration away from the entrenched North-South flow of development resources.

This carries immense promise but also significant challenges. It could pioneer collaboration models more tailored to the needs of the developing world. But translating this into tangible benefits hinges on robust institutional frameworks and effective African representation.

Both China and the GCC seek to secure resources in Africa; where China tilts towards oil and gas, the Gulf states prioritise agricultural investments. They also bring complementary resources to Africa.

Beyond finance, China can provide the critically needed industrial, technological and infrastructural capabilities to upgrade Africa’s productive capacities. Clean technology is a key driver of foreign direct investment (FDI) in Africa, and a sector where China has a clear edge.

01:21

China-built hydropower station in Angola enters main construction phase

While both the Gulf states and many African nations have substantial oil, gas or mineral reserves, their economic development starkly diverges. Why are Gulf nations so much richer than the African nations? Despite a population of under 60 million – less than 5 per cent of sub-Saharan Africa’s 1.2 billion people – the Gulf states boast a much larger collective gross domestic product than that of the entire African region. On a per capita basis, Gulf states also command more resources.