China-Africa relations: Musings from the Belt and Road initiative
In 2013, China proposed the joint building of the Silk Road Economic Belt and 21st Century Maritime Silk Road, also known as the Belt and Road. The Belt and Road is a proposal for economic cooperation along key routes similar to the ancient silk road. The ancient silk road developed over time and was used to transport goods and ideas over land and maritime trade routes from Asia to Europe, the Middle East and Africa. It promoted trade and cultural exchanges, leading to prosperity and development for countries along the Belt and Road.
Of particular significance to Africa is the 21st Century Maritime Silk Road, which can pave the way for greater transport connectivity, regional cooperation, trade and development. In March 2015, the National Development and Reform Commission (NDRC), ministries of foreign affairs and commerce unveiled the blueprint action plan for the implementation of the Belt and Road initiative. The plan called for policy coordination, facilities connectivity, trade, financial integration and people-to-people bonding. Whilst the initiative covers the area of the ancient silk road, it is not only limited to these areas. Rather, it is open for cooperation with all countries, international and regional organisations.
Primarily, the initiative will be funded by Chinese policy banks, the Asian Infrastructure Investment Bank and the Silk Road Fund. According to a translation of a 2015 speech given by Ou Xiaoli, Counsel for the NDRC Department of Western Region at the Post’s China Conference, implementation of the blueprint action plan will focus on two aspects. Firstly, building six economic cooperation corridors and key maritime pivot points, and secondly, strengthening cooperation in areas including infrastructure connection, trade and investment, resource exploration and finance.
The belt relates to the six economic corridors, namely, Eurasian land bridge; China-Mongolia-Russia; China-Central Asia-West Asia; the China-Indochina peninsula; China-Pakistan; and Bangladesh-China-India-Myanmar. The road relates to the maritime route. There are plans to build transport routes connecting major sea ports along the Belt and Road. These routes will establish Asia-Europe-Africa connectivity. Africa is reflected in the initiative with Kenya identified as a key maritime pivot point. The maritime route also involves ports along the eastern coast of Africa, horn of Africa and North Africa.
With the initiative, a number of routes for transferring goods to Africa and within Africa would open up. For instance, the Gwadar port in Pakistan, a maritime pivot point, has opened a new trade route for exporting goods to the Middle East and Africa. Chinese goods for export were transported from Xianjing to Gwadar, using routes upgraded and developed under the China-Pakistan Economic corridor. This was done amidst tight security, calling into question future use of the route by commercial cargoes.
Within Africa, benefits of the Belt and Road initiative can be seen in the transport and other infrastructure connectivity built by the Chinese, particularly in east Africa. For example, Kenya and Djibouti have had infrastructure projects carried out by Chinese companies, heavily financed by China’s Export-Import (Exim) bank. Kenya’s US$3.8bn standard gauge railway (SGR) project, the Mombasa-Nairobi SGR, is expected to be completed ahead of schedule later this year. The 609km railway project is being developed by China Road and Bridge Corporation. China Exim Bank provided 90% of the funding, with the remaining 10% provided by the Kenyan government. Other phases of the SGR will seek to connect Mombasa to Uganda, Rwanda and South Sudan, fueling the potential for increased economic growth and development for all countries involved.
China is also involved in the Lamu port project in Kenya being built by China Communications Construction Company. The Chinese company has invested almost $480m in the construction of three berths. Upon completion, the new port, part of the Lamu Port South Sudan-Ethiopia Transport Corridor, is expected to benefit the region.
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