Winston Mok

The View | Why China is much more to Africa than development ATM

Where once China was a source of infrastructure and financing, Africa will now look to Beijing for knowledge and guidance on industrialising

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China’s foreign minister Wang Yi (centre) holds hands with his counterparts, Senegal’s Yassine Fall (left) and Congo’s Jean-Claude Gakosso after a joint press conference at the Forum of China-Africa Cooperation on September 5 in Beijing. Photo: AP

Winston Mok

Published: 4:30pm, 10 Sep 2024

At the Forum on China-Africa Cooperation in Beijing last week, China pledged 360 billion yuan (US$50 billion) worth of support to Africa. Perhaps more important than the scale is the evolving nature of such contributions.

China is diversifying its African lending from energy and infrastructure mega projects to smaller projects in green energy and industrial initiatives. Instead of construction and financing, where China can bring the greatest impact, Africa will increasingly turn to Beijing for knowledge and industrial resources.

Foreign powers have long been interested in Africa’s natural resources. However, resources are susceptible to elite capture and are seldom a basis for building a broad-based middle class or path to sustainable national prosperity.

Equatorial Guinea, with its high oil reserves and small population, once had the highest per-capita GDP in continental Africa, a position it no longer holds with declining oil and gas production. With high inequality and widespread poverty, the central African country’s fading oil fortunes only enriched the few. Zimbabwe might have large lithium reserves, but it is Morocco which is leveraging its phosphate resources for industrialising in the battery value chain.

In 1950, East Asia and sub-Saharan Africa were similarly poor in terms of per-capita GDP. The divergence in economic development in the ensuing decades is astounding. As shown in East Asia, human resources rather than natural resources provide the foundation for economic growth.

Just like East Asia, the textile and garment sector represents a good starting point of industrialisation for Africa, which has been targeted by the likes of Benin and Ethiopia. The latter is also attempting to move into manufacturing electric vehicles. Whether in labour-intensive or technology-based manufacturing, the labour productivity of a quality workforce is key. Developing human capital is an essential step towards industrialisation.