Opportunities and Challenges of China-Africa Economic and Trade Cooperation under the Framework of the“Belt and Road”

Tu Minghui

(Shanghai Normal University,Shanghai 200234)

Abstract:In recent years,China-Africa relations have shown a trend of deepening and diversified development under the framework of the“Belt and Road”initiative,and new requirements on the level of institutional cooperation were put forward at the Beijing summit of the Forum on China-Africa Cooperation.As a regional public product,the“Belt and Road”is faced with deficiencies in the construction of major mechanisms,such as assistance mechanism,currency trade mechanism and security mechanism.Based on the“three pillar mechanisms”,this paper analyzes the necessity of institutionalized construction of the 3 regional cooperation products and elaborates its main content in detail.By connecting China-Africa regionalized cooperation and Beijing summit,the“Belt and Road”is given new connotation and significance.

Key words:China-Africa cooperation;the Belt and Road;mechanism construction;public products

On September 3,2018,the Forum on China-Africa Cooperation Summit of the Forum was held in Beijing.The summit adhered to the political consensus of the 2015 Johannesburg summit of the Forum on China-Africa cooperation on“strengthening political relations and deepening economic development”,inherited and developed the“Ten cooperation projects”put forward by the summit[1].At the Beijing summit,world leaders proposed“Eight Initiatives”measures to further plan cooperation in industrialization and modernization,infrastructure construction,trade and investment facilitation,capacity construction and poverty alleviation of Africa in the next three years.As a new concept of China-Africa cooperation,the“Eight Initiatives”has great strategic significance in shaping China-Africa cooperative partnership.The further development of China-Africa economic and trade relations is not only an extension of Chinese foreign policy of goodneighborliness,but also draws on the practical experience of regional economic development to push Chinese point-and-surface cooperation model such as China-ASEAN“10+3”,China-European Union,China-eastern Europe“16+1”,etc.towards systematic construction[2].China has actively promoted China-Africa economic and trade cooperation.On the one hand,it has enriched the theoretical connotation of China's diplomacy,such as the“new view on justice and benefits”based on the cooperation principle of"balancing justice and interests and putting justice first",and the“China-Africa Community of Shared Future”system based on identity and cultural exchanges.Follow the principle of putting practice first and implement various types of China-Africa cooperation projects.In 2000,the trade volume between China and Africa was only 10.4 billion dollars.In 2008,it exceeded 100 billion dollars for the first time.In 2017,trade between China and Africa totaled 169.75 billion dollars,an increase of 13.80% over 2016,which is the largest increase in recent years[3].

The“Belt and Road”highlights the function of regional public goods,the“Belt and Road”international cooperation and construction is not only targeted at countries along the route,but also a kind of global public goods provided by China to Africa.From the perspective of the opportunities and challenges faced by China-Africa economic and trade cooperation,this paper studies the significance of the“Belt and Road”regional public goods to China-Africa cooperation[4].

Chinese regional public goods supply is a supplement to the existing international public goods structure rather than a challenge and reconstruction of the international system.In line with the principle of mutual benefit and win-win cooperation,China-Africa institutionalized cooperation will take the three pillar mechanisms as the starting point and Forum on China-Africa Cooperation as the main content,to connect the“Belt and Road”China-Africa regional cooperation,highlighting the importance of mechanism construction[5].

I.Transforming the Foreign Aid Mechanism to Teach People How to Fish

The bearing of negative externalities of global public goods tends to concentrate in poor countries,which also have the largest demand for positive externalities and the worst response to negative externalities.Since the 1950s,international aid has been an important development intervention since the United States began to use the“Marshall plan”to revitalize Western Europe and indirectly controlled the lifeblood of Europe.During the cold war,the United States and the Soviet Union used aid as a means to achieve ideological output and differentiated and wooed independent countries as important strategic goals to seek global hegemony.Since the 1980s,Chinese foreign aid has ignored the characteristics of the export of ideology,but out of consideration of economic and geographical interests.

Since the beginning of the 21st century,Chinese aid to Africa has become institutionalized and transparent,which thanks to the restructuring of the African union,the establishment of the forum on China-Africa cooperation mechanism and the connection of Chinese overseas development plans at the level of regional cooperation,forming a regional cooperation model featuring multilateral cooperation.In October 2000,the first meeting of the forum on China-Africa cooperation adopted“Programme for China-Africa Cooperation in Economic and Social Development”,and established a cooperation framework on trade,investment,aid and debt relief.In 2011,China has published its first white paper on foreign aid,marking the opening and transparency of Chinese foreign aid.The“Belt and Road”initiative has brought Africa into key area and increased aid and institution-building to the region[6].On this basis,in Chinese white paper on foreign aid published in 2014,China established the basic principles of“mutual respect,equal treatment,keeping promises and mutual benefit”and“non-interference in the internal affairs of recipient countries”.In terms of aid content to Africa,western aid not only fails to target human capital cultivation and industrial development in Africa,but also drags African countries into a debt trap,causing chaos in African raw material market and financial market.China has always adhered to the principle of giving fish to everyone,and attached great importance to the construction of infrastructure and industrial sectors in African countries from a humanitarian perspective,focused on the cultivation of African human capital to improve the quality of the labor force.In 2000～2012,China carried out 2,546 aid projects in 50 African countries,with a total aid amount of 83 billion dollars.Among them,China has invested the most in road communication,industrial construction and public infrastructure such as hospitals and schools,which is benefit from the“Belt and Road”construction and cooperation.From 2012 to 2017,China invested an average of nearly us $12 billion annually in infrastructure construction of African countries,forming a multi-form aid mechanism featuring financing,assistance and cooperation.China-Africa trade has also entered a period of rapid growth,growing by over 90% in 2018 compared with 2015.

Data on China-Africa Economic and Trade From 2015 to 2018(Million Dollars)

As a platform for Chinese aid policy to Africa,the forum on China-Africa cooperation mechanism has been implemented phase adjustment in cooperation with the“Belt and Road”initiative,and forms the following characteristics:(1)Chinese aid policy towards Africa focuses on the unity of scale and benefit;(2)Chinese aid policy towards Africa emphasizes the principle of mutual benefit and win-win results;(3)Chinese aid policy towards Africa is moving towards openness and transparency.At the same time,China's assistance to Africa has been gradually optimized,specific features are as follows:(1)on the whole,Chinese aid projects towards Africa are three-dimensional;(2)Chinese aid projects towards Africa are led by key projects;(3)Chinese aid projects towards Africa have been carried out in a cooperative manner.

II.Establishing and Improving the Safety Guarantee Mechanism,and Combining Protection with Prevention

African security problems generally consist of the following factors:(1)class contradictions caused by elections;(2)terrorist attacks caused by the spread of extremism;(3)Nationality and ethnic group conflict;(4)piracy caused by poverty and shortages of commodities;(5)social unrest caused by poor medical care.The interwoven situation of various social contradictions in Africa determines that only by starting with the crux of the problem and building a security mechanism tailored to the case can prevention and protection be combined from the root.

Development is the foundation of security,and security is the prerequisite for development.The lack of social resources caused by poverty is a major cause of the high incidence of infectious diseases and piracy in Africa,in addition to increasing humanitarian assistance and expanding infrastructure supply,Chinese rich experience in poverty alleviation can be applied to African countries through institutionalized design.It is an important topic of China-Africa political cooperation to strengthen the exchange of governance experience and the construction of social welfare and accelerate the training of African elites to reconcile social contradictions.In addition,in response to the proliferation of extremism and ethnic conflicts,China should work with the international community and the United Nations to decisively address relevant political issues,work with countries along the“Belt and Road”to curb the spread of extremism in the Middle East,actively intervene in humanitarian disasters caused by ethnic conflicts,and strengthen the role of UN peacekeeping operations.

In defense cooperation,China has strengthened Africa's security capacity building through military assistance,joint exercises and training,personnel training and equipment and technology exchanges.To implement the Beijing action plan through institutional building and support the building of African collective security mechanisms,and carry out the following institutional cooperation on this basis.Firstly,establish the forum on China-Africa cooperative security,provide a platform for China-Africa exchanges in the field of peace and security;Secondly,establish dialogue and cooperation with Interpol in Africa,deepen security and police cooperation,jointly combat transnational crimes,and strengthen intelligence sharing and coordination on counter-terrorism and transnational crimes;At last,improve the mechanism of“the forum on China-Africa cooperation—legal forum”,deepen judicial cooperation and exchanges on the rule of law,strengthen the level of China-Africa anti-corruption cooperation,and establish a China-Africa joint arbitration mechanism on labor services.

III.Improving Regional Monetary,Financial and Free Trade Mechanisms

African countries generally have small markets,by strengthening cross-border and cross-regional connectivity through well-functioning infrastructure to change the situation of high transportation costs,power shortage and backward communication facilities will help improve the efficiency of production and services and promote economic and social development.What needs to be pointed out is that the functions of the African union and the African regional integration organizations overlap a lot.In addition,some countries cannot effectively deploy their medium-long-term strategies due to regional disputes and civil strife,and the tendency is reinforced by the myopic behavior of leaders.In recent years,with the deepening of the“Belt and Road”cooperation,the driving effect of infrastructure has greatly stimulated the economic development potential of Africa,and the regional market has been established spontaneously with the improvement of infrastructure.

To perfect the financial and trade mechanism,we should start with currency and debt.At the monetary level,due to the generally low credit of African countries' currencies,the exchange rate is mainly pegged to the central African franc with the central African economic monetary community as the issuing institution and the West African franc with the West African economic monetary common union as the issuing institution with the euro as the main currency,pegged to the old British colonies such as Kenya and Uganda where sterling was the main currency with native shillings used,South Africa with South African rand as the main currency,Egypt with Egyptian pound as the main currency,Angola with kwanza as the main currency and Nigeria with naira as the main currency,etc.The currencies of African countries are complicated and fluctuated greatly under the influence of pegged currencies.The main reason lies in the financial debt and currency issuance rights of the countries with exchange rate linkage.On this basis,the process of yuan internationalization should be accelerated through trade and finance to reduce the loss caused by the exchange rate issue.In addition to deepening trade and financial cooperation,the pace of China's financial opening to the outside world should be accelerated,the reform of state-owned banks in China should be deepened,the channels for foreign financing and loans should be expanded,the structure of banks should be optimized,the investment vitality of private banks should be stimulated,and the development of the bond market should be standardized and improved.In terms of debt,in addition to the interest-free loans and low-interest loans for the construction of aid mechanism,it is mainly improved by helping African countries to train relevant talents in relevant fields and giving helpful suggestions on the debt problems of African countries.

In addition,the Beijing summit of the Forum on China-Africa Cooperation will take periodic results of the“Beijing action plan”as the content,including“Eight Initiatives”plans,a 60 billion dollars fund group and important plans for the development of the monetary,financial and trade systems.China-Africa economic and trade cooperation is mainly made up of trade,investment,aid and foundation.As the main driving force of China-Africa economic cooperation,different from the cooperation of“blood transfusion”,trade and investment have the characteristics of“hematopoiesis”,the specific performance is as follows:(1)At present,the 60 billion dollars fund group mainly includes the establishment of a special fund for development finance and a special fund for African import trade financing,which aims to promote Chinese enterprises' investment in Africa,so as to lead investment and adjust trade balance;(2)Africa welcomes the deepening of the“Belt and Road”initiative,strengthen cooperation between AIIB,the silk road fund and other multilateral financial institutions and Africa;(3)Accelerate the internationalization of yuan.Continue to strengthen cooperation in local currency settlement,expand the use of local currency in bilateral trade and investment financing,and support the development of yuan settlement services in Africa.The imbalance of low supply and high demand of public goods in Africa needs to be adjusted through the intervention of major countries outside the region,which improves the supply capacity of public goods in the region by means of mutual compatibility or complementarity with the supply within the region,with the help and support of external forces,countries in the region with low supply and high demand will accelerate the process of morphological evolution towards high supply and high demand.

“Belt and Road”highlights the“five links”theme of policy communication,infrastructure connectivity,unimpeded trade,monetary integration and people-to-people connectivity.High-level connectivity and political mutual trust are the cornerstone of the“five links”.The essence of the progress from the economic level to the political level is the deepening of mutual trust between the two sides,and the core of the mechanism construction is trust construction.In recent years,China and Africa have had frequent high-level exchanges of visits,which has enhanced political mutual trust and laid a good foundation for promoting cooperation in all areas of the“Belt and Road”In 2015,the Chinese government signed a memorandum of understanding with the African union on the construction of "Three Transport Priority Network",covering roads,railways and infrastructure across Africa and focusing on improving Africa's infrastructure.In terms of promoting the industrialization of the host country,China has established six overseas cooperation zones in five African countries,among which the Oriental industrial park in Ethiopia has made positive contributions to improving local employment and product export.At the 29th The Assembly of the AU summit in Ethiopia in 2017,a number of senior AU officials expressed the need to strengthen the alignment of Africa's development strategy with the“Belt and Road”.The construction of the“Belt and Road”has won the consensus of the international community.The China-Africa partnership network is improving day by day.The construction of the“Belt and Road”and cooperation are highly compatible with the development and construction of Africa.Under the framework of the“Belt and Road”strategic initiative,the infrastructure construction represented by"road" has been continuously extended to the African continent,boosting the industrialization and regional integration development of African countries.

In the overall atmosphere of active and pragmatic of China-Africa cooperation,how to benefit African countries with excess capacity through the supply of regional public goods is an urgent task in the process of China-Africa regional cooperation.On the basis of the“Belt and Road”construction and cooperation as the framework of regional public goods output,the system is established through the mechanism to regulate the supply process at the operational level,which coincides with the urgent need of global governance to be expressed through innovation at the international mechanism level.By conducting institutionalized cooperation through political issues in China and Africa,Forum on China-Africa Cooperation is endowed with new strategic connotation and comprehensively connects with the“Belt and Road”strategic objectives.Through institutionalized construction,it can help China to supply non-regional public goods from the top-level design,and then form a complementary relationship with the global hegemonic system of public goods,reduce the free-riding behavior in the region,slow down the trend of private ownership of public goods,and try to eliminate the negative externalities caused by the economic and political development in the region,so as to realize the strategic goal of the transformation and upgrading of China-Africa cooperative partnership[7].

The development course of the“Belt and Road”is from“China initiative”to“international public goods”.From 65 countries to the world,the“Belt and Road”has become a global strategic cooperation,as a regional international public goods,it will bring new prosperity to the vast African region.The“Belt and Road”advocates that member states and members of relevant international organizations carry out various international affairs and related activities in the principle of“wide consultation,joint contribution and shared benefits”[8].Its equality,sharing and reciprocity have become an important content and manifestation of regional international public goods.From the perspective of public goods supply mechanism,the construction and cooperation of the“Belt and Road”are beneficial supplement and improvement of the international public goods supply framework in the vast African region,with unique advantages,African countries have great differences in economic development and interest appeal,which facilitates mutual coordination and the reduction of monitoring costs,and makes it possible to reach consensus on collective actions.There are no particularly strong countries in Africa,and cost sharing can significantly reduce the risk of regional international public goods being "privatized" by one country[9].Africa,represented by developing countries,has enormous potential,at the time when hegemonism and protectionism are prevalent in the United States and the political crisis in Europe is deepening and too busy for their own time,China should focus on developing countries and make strategic arrangements for institutional construction through top-level design,build a public goods supply system based on the theory of regional public goods,and take the mechanism construction at the regional level as the main task to transform and upgrade domestic industries by digesting excess capacity[10].