Will Trump’s US-Africa Policy Vacuum Help Boost Chinese Trade With Africa?
Donald Trump’s election could not have been better news for the economic and political ambitions of China, Doug Saunders reported in Globe & Mail.
Suddenly, all economic, diplomatic and energy roads lead to Beijing from Africa, Europe, most of Asia and most of South America
China is preparing to step into the vacuum with Chinese-led institutions pledging $1.2-trillion in 60 countries to build railway lines, oil and gas pipelines, highways and major ports. These will link China with much of Africa and the rest of the world.
African policymakers are struggling to figure out what an isolationist Trump presidency will mean for their countries, Huffington Post reported.
By failing to propose a clear approach toward Africa, Trump may help Beijing.
There are signs that some African countries may lean on China to compensate for an anticipated pullback in U.S. trade, investment and engagement on the continent. This could be a huge opportunity for China to strengthen its diplomatic position in Africa. Public opinion towards the Chinese in Africa has steadily improved, according to a 2016 Afrobarometer survey.
If Washington retreats from constructive engagement in Africa, China may be a major beneficiary, said Eric Olander and Cobus van Staden with The China Africa Project:
South Africa, in particular, has been steadily shifting its foreign policy away from the West towards China in recent years. Now, with the election of Donald Trump, Pretoria should no longer count on Washington in the international community as it’s done in the past, warns University of the Witwatersrand international relations professor John Stremlau in an interview with CNBC Africa following the U.S. election.
African manufacturers could profit from China’s economic rebalancing, but that may have more to do with rising labor costs in China than it has to do with retreating U.S.-Africa trade.
Manufacturing salaries are rising fast in China, which is starting to outsource production to other countries, mainly in Southeast Asia, African Business Magazine reports.
There will be opportunities for African countries to take advantage of this trend, if they have enough power, water and transport infrastructure.
China has become a victim of its own success, Neil Ford reported in African Business Magazine. Manufacturing salaries have risen an average 14 percent a year the past five years. Investors are looking for cheaper labor. International firms that outsourced manufacturing to China are looking to cut costs, as are Chinese companies themselves.
China is trying to move its economy away from cheap manufacturing to more skilled production, such as robotics and industrial engineering, encouraging domestic consumption.
The countries that are benefiting right now are mainly Asian — Vietnam, Bangladesh and Myanmar. Sectors heavily dependent on labor — textiles and clothing production — could find a cheap workforce in Africa.
But it’s not just about cheap labor, Ford said. Infrastructure is important and this is where most of Africa has failed in the past. Manufacturers need reliable power and water supplies.