Facing barriers in West, China to push green products at Africa summit
The high-level meeting, held every three years, will be the first since the world emerged from the COVID-19 pandemic and China suffered its own economic slowdown. It also comes amid growing geopolitical rivalry and as China shifts the priorities of its global infrastructure-building project, the Belt and Road Initiative, or BRI, to what it has dubbed “the green BRI” and “small is beautiful” projects.
The theme of the meeting, which takes place from September 4-6, is “Joining hands to promote modernization,” and Lin Jian, a Chinese foreign ministry spokesman, said it will “open up new vistas for China-Africa relations.” One of these areas, according to China’s ambassador to South Africa, Wu Peng, will be “to support Africa’s green development.”
While many African countries — some of which are facing energy crises — will welcome help with their transition to renewables, Paul Nantulya, a research associate for the Africa Center for Strategic Studies in Washington, explained that China also “benefits greatly.”
“If you look at green growth for instance, the technology which is marketed to African countries, which African countries have to buy, either through loan finance or directly through commercial entities, that’s one way in which China benefits,” he told VOA.
And China needs new buyers.
China’s overproduction woes
China is the largest producer of solar batteries in the world and in 2023 accounted for three quarters of global investment in overall green technology manufacturing, according to data from the International Energy Agency. It also produced more than half of the electric vehicles sold worldwide last year.
Its lead in these industries has resulted in rising competition with the West. The United States and European Union have enacted protectionist policies, increasing tariffs on products from China including electric vehicles, batteries, solar panels and critical minerals. Europe and the U.S. want to boost their own manufacturing and create jobs.
“We see China’s products are increasingly facing restrictions in the U.S. and Europe, and I believe China will be looking for alternative markets in Africa,” Cliff Mboya, an analyst with the Pretoria-based China Global South Project, told VOA.
However, he said African governments could use China’s woes on that front as a bargaining chip. While China is the continent’s biggest trade partner, it exports a lot more to Africa than it imports.
“We know that China previously promised more market access for African products, so as China looks for the African market for some of its products that are facing high tariffs and limitations in the West…it presents an opportunity to negotiate for more access of African products into the Chinese market,” Mboya said.
The West is concerned about possible “dumping” by China, in which it floods foreign markets with cheap exports to get rid of its global trade surplus. Mboya said that should also be a concern for African governments.
“We should also be able to negotiate and ensure it doesn’t lead to dumping of these products into the continent because we also need to create employment for our youth and also ensure that we are also able to produce some basic goods in the continent,” he said.
In sub-Saharan Africa, 70% of the population is under the age of 30, according to data from the United Nations.
Ambassador Wu didn’t mince his words when talking about the “sensitive issue” at an event in South Africa earlier in August.
“In 2023, China also produced nearly 9.5 million electricity vehicles, EVs, and exported nearly 1.8 million EVs to the world,” he said. “Some people blame China for so-called overcapacity.”
“Europeans or the U.S. already — or will — levy high tariff rates against these EVs.”
“Let’s wait and see alright? If they can catch up to produce more EVs, affordable for the customers in a very quick way…no problem. But if they don’t, I think it’s a little bit unreasonable,” he continued.
China, however, is facing a mismatch in supply and demand for its products. Last year, its solar cell production doubled global demand and in July, major solar panel company Longi Green Energy Technology logged a net loss of some $750 million.
“There's significant parallels between the excess capacity China faces now in its clean technology sectors, as with the excess capacity a decade ago in heavy industry and infrastructure, which was when the BRI was initially launched,” Yunnan Chen, a researcher at London-based research group ODI, told VOA.
China used the BRI to “offshore” its domestic industries and build markets for its infrastructure in developing countries, and it is now doing the same with renewable energy, she added.
“Tariffs from Western markets is another accentuating pressure that will make middle-income emerging markets even more important for Chinese goods, and even for the offshoring of production lines and supply chains to be able to access EU and Western markets via third countries - as we're already seeing in Vietnam and Mexico,” she said.
Pivot to Africa
Chinese Ambassador Wu said the FOCAC will focus the needs of African countries in the energy transition and that “China will encourage Chinese enterprises to invest.”
He said that new energy cooperation could become a growth driver and a highlight in economic and trade cooperation between China and South Africa specifically.
But Yun Sun, director of the China Program at the Stimson Center in Washington, said FOCAC’s focus on green technology and energy wouldn’t necessarily be a boon for Africa.
“It does not necessarily put Africa in an advantaged position in the global supply chain. For example, China has a number of lithium assets (mines) in Africa and that technically could be called green energy and technology cooperation between China and Africa,” she said.
“Traditionally, Africa had been a source of raw materials for China, such as oil and minerals. If now it is lithium and other critical minerals used for green energy, how is it different from before?” she added. “Mining and processing whose benefit for locals are debatable.”
Besides green technology, the analysts expect FOCAC will also focus on areas including agricultural modernization and trade, information technology and connectivity, and education and training. African leaders will also be looking to get a one-on-one with China’s leader, Xi Jinping.
Some African countries, which borrowed heavily from China and are saddled with debt, are facing pressure at home.
Kenya, for example, has been rocked by anti-government protests. But experts say they doubt African leaders will push for debt restructuring publicly, to avoid embarrassing China.