In Africa, China seeks an outlet for its clean technologies

China is seeking to expand its international markets in the face of growing trade restrictions imposed by the West. Meanwhile, Africa wants investments that will boost its development and increase the added value of its industries. Both sides have found common ground in green technologies. And the Forum on China-Africa Cooperation Summit held this past week in Beijing, where both blocs staged their economic and geopolitical love affair, has provided the perfect opportunity to match supply and demand.

Chinese President Xi Jinping opened the event on Thursday with a speech calling for jointly promoting environmentally friendly modernization. “China is ready to help Africa build green growth engines,” he told more than 50 heads of state and government from African countries gathered in Beijing’s Great Hall of the People, a massive Soviet-style building in Tiananmen Square. The president pledged to launch 30 clean energy projects as part of the action plan for Africa over the next three years. He announced financial aid of nearly $50.7 billion and the intention to create one million jobs on the continent. United Nations Secretary-General António Guterres, another one of the event’s star guests, proclaimed shortly afterwards: “The China-Africa partnership can drive the renewable energy revolution. It can be a catalyst for key transitions on food systems and digital connectivity.”

Many factors explain China’s green turn. Perhaps the biggest of these is its powerful, planned — and heavily subsidized — clean-tech industry. It has invested 10 times more than all of Europe in the solar industry over the past decade, and its companies control 80% of the value-added chain in this industry, according to a 2022 report by the International Energy Agency. “This means that countries in the Global South interested in renewables will almost certainly source components and know-how from China,” says Cobus van Staden, one of the editors of The China-Global South Project and host of the China in Africa podcast, in a recent article about the summit.

Exports of what China calls the “new three” — electric vehicles, lithium-ion batteries and solar cells — grew by 30% in 2023, according to the Chinese government’s work report. The productive machine is running at full throttle. It is part of the new growth model devised by Communist Party leaders to reinvigorate a slowing economy plagued by the bursting of a property bubble. They are the new productive forces, as Xi Jinping has called it, a slogan with Marxist echoes but projected toward a hyper-technological future.

But this overcapacity has become one of the main problems between China and the West. The European Union and the United States have reacted with tariff increases on products such as electric vehicles and Chinese photovoltaic products, arguing that the industry is unfairly subsidized. “They are facing increasing barriers in all their traditional markets in the North,” Cobus added in an online chat with correspondents last week. And one of the solutions is to pivot supplies to places like Africa. He also foresees a greater presence of large Chinese technology companies — which the West has also placed on its blacklist — such as Huawei, which could come into play in the improvement of electrical networks on the continent, one of the fields into which the Shenzhen-based company is diversifying.

Exports of what China calls the ‘new trio’ — electric vehicles, lithium-ion batteries and photovoltaic products — grew by 30% in 2023

The trend is already being seen in the channeling of investments, says Zhao Yage, a 44-year-old Chinese citizen who works as a consultant at CHN Energy Investment Group, a Chinese state-owned giant with interests across half the globe. “The government has the policy and specific funds to support it.” Zhao is among a thousand Chinese and African businessmen and executives invited to a special meeting on the sidelines of the African summit in Beijing. It is Friday, and dozens of people are milling about, networking over coffee and exchanging business cards in a lobby of the National Convention Center in Beijing. Premier Li Qiang is about to give a speech. The sober suits of Asians mingle with colorful African clothing.

Opportunities for Chinese companies

The Chinese offer sounds good to African representatives. “It is very interesting because today, in Central Africa, Gabon is a leader in sustainable development,” says Ghislain Moandza Mboma, director general of the national agency for the promotion of investments in that country. The relationship between China and Gabon has been strong for years. The Asian country is the main destination for Gabon’s resources, which mainly exports oil and manganese, one of the components of lithium batteries. Moandza Mboma has come to sound out private investors. His public agency is deployed in all sectors, from roads to the exploitation of mines and hydrocarbon deposits. In any case, he assures that green has become one of the “strategic axes” of development policy in his country.

In Africa, where only 44% of people have access to stable electricity, there is a huge demand for energy, which also slows down the process of industrialization. “Filling this gap in a sustainable way offers significant opportunities for Chinese companies,” Cobus adds in his article.

China is Africa’s largest lender, investor and bilateral trading partner, but the gigantic infrastructure projects it began implementing a decade ago as part of the New Silk Road, the mega-program with which it aims to connect the world, are now behind it. The volume of loans peaked in 2016; by 2023 they amounted to a fifth, and more than half were transfers to the financial sector, which the Global Development Policy Center at Boston University interprets as a possible search for risk mitigation to avoid exposing Beijing to the debt problems of African states.

Smaller-scale and often scalable, green projects fit in with the Chinese government’s new philosophy, summed up by the slogan: “Small, but beautiful.” That is, projects with budgets of between $100 million and $250 million, shorter repayment periods and the use of mixed public-private financing.

Fourth industrial revolution

Analysts warn that the new course, which will involve a significant increase in Chinese exports, could worsen Africa’s already huge trade deficit with China. African partners have already noted that Beijing has not fulfilled its commitment from the last summit, held in 2021 in Dakar, to buy African goods worth $300 billion. Throughout the summit, African leaders have called for greater access for their products to the People’s Republic, and for the acceleration of Chinese technology transfers, to move their industries up the value-added chain. “In the era of the fourth industrial revolution [...] the question of technology transfer is urgently raised in order to improve Africa’s productive capacities and, consequently, reduce the magnitude of our trade deficit,” said Moussa Faki, president of the African Union Commission, on Thursday in his opening speech.

“Africa has the potential, its population is very young,” said Assane Mbengue, president of the Federation of China-Africa Friendship Associations, shortly before the summit opened. He also called for more production made in Africa and more educational exchanges. Mbengue, who is from Senegal, says he came to study in China in 1978. Beijing has now set up more than 60 Confucius Institutes on its continent. These cultural institutions are often criticized in the West, where their opponents accuse them of being propaganda tools, threatening the academic freedom of their partners and even harboring spies. In Africa, one of the latest institutes was opened in December at the University of Venda, in the rural South African province of Limpopo. It is a Confucius Institute for Green Technology, where Chinese language teaching is combined with training in renewable energy.

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