Historically the priorities of the FOCAC fora have mapped the changing tenor of the China-Africa relationship. Over the 2000s, this has shifted from natural resources trade, to investment, industrialisation and infrastructure. The 2010s saw a rapid expansion of official development finance from Chinese institutions, with pledged finance packages of $60bn USD announced via the FOCAC forum in 2015, and repeated (though with a slight reallocation) in 2018.

Since then, however, there has been a clear slowdown in China’s overseas finance, prompted in large part by changing domestic conditions, but no doubt bolstered by the continued negative publicity around the false meme of Chinese ‘debt-traps’, and the very real contribution of Chinese loans to African debt service. As the dust has settled on FOCAC 21, what do the outcomes say about current China-Africa priorities?

New areas of cooperation in health, climate and digital sectors

First, the Covid pandemic has centred health cooperation as a key focus of cooperation. Most prominent has been the pledge to deliver 1 billion vaccine doses to African countries, with a promise of achieving a 60% vaccination rate in Africa by 2022. In contrast to the lacklustre efforts so far from OECD donors in vaccine provision, this was a powerful gesture to demonstrate Chinese ambitions as a global public goods provider in this arena. Sixty percent of these doses are to be donations, but 40% are to be provided through ‘joint production’, which signals a promising avenue to bolster African regional capacity in manufacturing and medical technology – as well as signalling a new sector of investment to Chinese enterprises.

Second, infrastructure investment – China’s bread-and-butter for the last decade – appears to have fallen down the menu. While the heyday of the early 2010s saw a ramp up in finance for infrastructure investment, mentions of infrastructure in Xi’s official speeches all but disappeared.

The action documents outline a clearer plan for infrastructure, suggesting a shift away from the mega-projects that characterised the Belt and Road Initiative (BRI), towards a more strategic approach focused on regional connectivity, trade promotion and industrial cooperation.

One area to highlight is in climate and green energy, where commitment to scale up renewables and invest in climate infrastructure has become a key feature of future strategic cooperation. In the same way that the BRI channelled the spillovers of domestic infrastructure investment and excess capacity overseas, it’s not unlikely we’ll see a similar spillover in green tech sectors to developing countries in the years to come.

Third, new sectors of interest, particularly in digital technologies and innovation, have emerged as salient areas of cooperation, opening up opportunities for e-commerce and the ‘digital economy’ that could serve as platforms for African production, export and tourism sectors in the years to come. New cooperation projects also focus on key hi-tech strategic sectors including satellites and remote-sensing, and scientific research cooperation.

Doors close on bilateral loans, new windows open for other finance

Perhaps not surprisingly, the previous $60 billion basket of finance has not been matched in this summit. The total pledged package from the forum equates to around $40 billion, though as some have pointed out, this does not include the in-kind value of vaccines and the undefined cost of the 10 regional connectivity projects. As well as significant cuts to development financing, grants and interest-free loans are gone in this year’s pledges. This is potentially a sign of China reducing its aid, in favour of emphasising commercial cooperation through finance for trade and investment.

What’s interesting is the pledged credit lines not to bilateral lending but to support “African financial institutions”, including sub-regional development banks where it is a shareholder. This ties well into existing initiatives to capitalise and empower regional and national development banks. In Africa, these institutions are sorely undercapitalised but may play a powerful role for development, and perhaps constitute safer avenues for credit than sovereign lending.

Finally, China’s pledge to reallocate $10 billion, one-quarter of its $40 billion Special Drawing Rights (SDR) allocation to African nations is small in material terms, but outstrips the commitments of high-income countries such as the UK (20%) or US (18%).

FOCAC is just another component of China’s larger economic and soft power strategy

The importance of Africa, as well as of all BRI partner countries, to China should also be read in the context of China’s new masterplan for technological self-reliance – the Dual Circulation Strategy. As Alicia García Herrero explains, contrary to the rebalancing after the 2008 Global Financial Crisis, when China pushed to increase consumption, and thus more imports, in order to shift away from an export-led growth model, the current rebalancing of the Dual Circulation aims to meet the consumption-based model with domestic production. This is to shield the economy from external volatility caused by trade and technological wars with high income nations.

This will entail reducing reliance on imports and upgrading the indigenous technological capacity to substitute intermediate and high-end good imports, such as semiconductors and electric vehicles, from major exporters such as Germany, Japan, South Korea and the US. At the same time, the second component of the Dual Circulation is the boosting of external demand in BRI countries, in the context of Western containment, as a way to ensure that China’s technological progress will be able to remain independent of US intentions. African economies and markets will be a key component of this strategy.

FOCAC, in the end, is a platform for soft power as well as economic cooperation. While finance may decline or change form, the forum continues to emphasise China’s role as a partner and a political equal to African states (reflected quite emphatically in the English translation of China’s new white paper on China-Africa relations, as Marina Rudyak notes).

The announcement of a new ‘Global Development Initiative’ by President Xi, and now couched into the FOCAC discourse, also signals its growing aspiration to play a larger role in the development landscape. The consistency of these political and diplomatic relationships with Africa, of which FOCAC is one aspect, serves powerful strategic purposes for China, which Nadege Rolland at the National Bureau of Asian Research (NBR) has compared to ‘a new Great Game’ on the continent: despite ebbs and flows, Africa is not disappearing from China’s priorities.