Analysis of China’s Supply of Regional Public Goods to Africa

Zhou Jinyan

Institute of Western Asian and African Studies，

Chinese Academy of Social Sciences

With the increase of Chinas economic strength and its international political status on the rise， providing international public goods has become an important part of Chinas participation in reshaping the international order. As a piloting effort prior to the Belt and Road Initiative， China-Africa cooperation has provided Africa with a large number of regional public goods， among which infrastructure construction and the alignment of Chinas development experience with Africas development strategy are the best and most unique ones.

Chinas Contribution

to Regional Public Goods

Supply in Africa

Since the launch of the Forum on China-Africa Cooperation （FOCAC） in 2000， with the deepening of China-Africa cooperation and the upgrading of their strategic cooperation level， Chinas regional public goods for Africa have also shifted from hard ones such as infrastructure to both hard and soft ones. Soft regional public goods include knowledge， experience and institutions conducive to the sustainable development in Africa.

1. Material public goods： promoting connectivity of infrastructure in Africa

Parag Khanna， an American scholar， believes that the most important public good of the 21st century is infrastructure， and China is a major provider of it. According to statistics from the World Bank in 2017， the annual funding shortage for African countries in infrastructure construction was $48 billion， while the African Development Bank estimated the figure at $68-$108 billion. China-Africa infrastructure cooperation was included in the “Ten Major China-Africa Cooperation Programs” declared at the FOCAC Johannesburg Summit in 2015 and listed as a major area in the “Eight Initiatives” declared at the FOCAC Beijing Summit in 2018. According to the US accounting firm Deloitte， China has funded one-fifth of Africas infrastructure projects and undertaken one-third of Africas infrastructure projects， being the largest funder and contractor of? African projects. Because of Chinas influence， infrastructure construction in Africa， once marginalized by western aid， has again drawn attention from major powers. For example， in April 2019， the UK launched a three-year-long Prosperity Fund infrastructure project. Japan has also listed the expansion of overseas infrastructure investment as its top priority of development cooperation.

2. Institutional public goods： underscoring the importance of African issues

The post-war international order is essentially a set of Western-dominated international institutional arrangements with rules more reflective of Western development experience， serving the interests of developed countries， although developing countries in Africa and other continents have nominally been equally included in the global governance system. Africa remains in a vulnerable position in the international order.

Adhering to the principle of pursuing shared growth through discussion and collaboration， shaping a new type of international relations with win-win cooperation as the core， and catering to the development needs of Africa， China has led the international community to provide more public goods to Africa by empowering institutionalized new platforms for development . As a result of Chinas sustained efforts， the G20 summit has become an institutionalized platform for pushing forward Africas development. In 2016， China， as the host country， first launched the G20 Initiative on Supporting Industrialization in Africa and LDCs at the G20 summit in Hangzhou. The initiative was renewed at the G20 summit in Hamburg in 2017， where Germany， as the rotating presidency， launched the G20 Compact with Africa， or CWA， which was also institutionalized afterwards. The Asian Infrastructure Investment Bank （AIIB）， established upon Chinas initiative， placed its focus on Asia， but also attached importance to business development with Africa. In May 2019， the AIIB signed a memorandum of understanding with the African Development Bank. As of December 2019， the AIIB had admitted 14 African countries including Algeria， Egypt， Ethiopia， Kenya， South Africa and Senegal as member states.

3. Knowledge public goods： providing alternative development knowledge and experience

Unlike the one-way or top-down knowledge transfer model of the West， China-Africa cooperation has created an equal and mutual model of learning. With a similar historical background and common development challenges， China's development concepts and ideas are more relevant to African countries. In September 2015， President Xi Jinping announced at the UN Sustainable Development Summit that China would set up a center for international knowledge on development. Since its establishment in 2017， the Centre has been committed to providing knowledge public goods and contributing Chinas wisdom and experience to a vast number of developing countries， including African countries. Unlike the summary based on the countrys own experience， the knowledge production for the purpose of providing public goods focuses more on the applicability of experience and the accordance with the development strategies. The dissemination of Chinas development knowledge and experience is conducive to breaking the western monopoly on the development knowledge system and serving African countries development strategy with alternative options. It is worthy of emphasizing that China is not meant to be the dominant supplier of public goods in Africa， but rather to promote the autonomous development of Africa through the sharing of ideas and experiences， and ultimately to achieve the goal of promoting the autonomous provision of public goods in the African region.

Opportunities and Challenges

for China in Supplying Regional Public Goods to Africa

At the current stage， multiple supply mechanisms of public goods coexist in the African region. The first is the supply led by big powers outside the region such as the US and Europe， the second is the innovative supply of public goods by China and other emerging economies， and the third is the self-supply of regional public goods driven by regional organizations and sub-regional organizations and coordinated by regional countries. The supply of public goods in the African region is faced with difficulties including big shortage of supply， mismatch of supply and demand and the “privatizing” tendency of western powers. At the same time， Africas will to provide regional public goods on its own is growing， but the continent is currently unable to meet its real-world needs by relying solely on itself. All these have provided a new opportunity for China to provide public goods to Africa. However， as a latecomer in the supply of international public goods， China also faces the challenges concerning product sustainability， supply and demand coordination and supply-side competition in its supply of regional public goods to Africa.

1. Sustainability challenges in infrastructure public goods

From a supply-side perspective， given China's capacity advantage in infrastructure and Africas huge infrastructure shortage， Chinas future supply of public goods to Africa will still focus on infrastructure， but the issue of sustainability poses a challenge to China. One is the sustainability of finances and financing. The financial resources from China alone are hard to meet Africa's huge need for infrastructure investment. Second， infrastructure projects are faced with the issues of operation and maintenance after completion. Third， infrastructure projects are subject to social development and environmental protection requirements.

2. Challenges in the precise alignment of China-Africa development strategies

The advantage of regional public goods is that they can address regional problems in a more targeted way. Catering to the development demands of host African countries， and adhering to the principle of pursuing shared growth through discussion and collaboration are an important difference between China and the hegemonic west in supplying public goods. The alignment of China-Africa development strategies mainly includes three aspects： the first is the alignment of Chinas proposals with the medium to long term development strategies of African countries; the second is the alignment of China's proposals with the 2063 Agenda of the AU; and the third is the alignment of Chinas proposals with the 2030 Agenda for Sustainable Development of the UN. Chinas aid and investment model in Africa urgently needs to shift from “request-oriented” to “demand-oriented” in the host country. Precise alignment requires both an understanding of the needs of African countries and a pool of international inter-disciplinary talents who understand Chinas development experience. As a latecomer in the supply of regional public goods， China does not have a sufficient international talent reserve， and lags behind the West given the latters huge development aid industry and vast professional talents pool.

3. Western accusations undermine? public opinion towards China

Western countries are increasingly worried about Chinas growing influence over Africa. With the discourse advantage in Africa， the western media and some West-funded African media are factlessly discrediting China in public opinion. The rhetoric of “neocolonialism”“debt trap” and “plundering resources” is massively disseminated， bringing a negative impact on China-Africa cooperation.

Paths for China to improve its supply of regional public goods to Africa

China can further improve the supply of regional public goods so as to contribute high-quality regional public goods to Africa by increasing the funding and operational sustainability of infrastructure projects， enhancing Africas capacity to provide regional public goods on its own， strengthening the alignment with Africas development strategy and strengthening international coordination and cooperation.

1. Improving the funding and operational sustainability of China-Africa cooperation infrastructure projects

The first is to innovate the mode of investment and financing and give play to the leveraging role of aid. Regarding the “Belt and Road” construction， the 2019 Chinese government work report proposed to “observe market principles and international rules，” which requires China to place more emphasis on project feasibility and sustainability when planning infrastructure projects in Africa. To improve the efficiency in the use of funds， we should explore diversified financing channels for different types of infrastructure projects， let aid play the leveraging role， and use free aid to conduct feasibility studies of infrastructure projects. For commercial infrastructure projects， we can expand financing channels through market mechanisms to attract the participation of private capital; for large-scale infrastructure projects which may not yield substantial economic returns in the short term， governments， development banks and private enterprises can cooperate in the form of public-private partnership （PPP）; and for infrastructure projects aimed at promoting public well-being which yield limited financial returns but big social returns， such as schools， hospitals and well-drilling water projects， the government should play a leading role and provide public goods with free aid.

The second is to strengthen dialogue and consultation with African countries to understand their long-term development plans and real needs， and decide on cooperation projects together. While continuing the work on in-stock infrastructure projects， we need to work out a list of prioritized infrastructure projects through discussion with African countries. We should also actively participate in the strategic planning and design of infrastructure projects， fully assess project risks， and prudently decide on new infrastructure projects.

The third is to strengthen capacity-building and technology transfer， and to enhance the technology spillover effects of infrastructure on local Africa. Chinese enterprises should strengthen the training of local talents in Africa， transfer technology to local construction contractors and operators in Africa， and cultivate local technicians for Africa. On the one hand， this will help create jobs， ensure sustainable operation after the completion of infrastructure， and help African countries improve their position in the global division of labor. On the other hand， it will improve Chinas international image as a provider of public goods in the African region， and empower China in its response to the risks of public opinion and competition from big powers.

2. Boosting Africas capacity to provide regional public products on its own

Given the fact that Africas willingness to provide regional public goods on its own is growing， China can help Africa achieve this goal by strengthening cooperation with the African Union， sub-regional organizations and major countries in Africa， especially South Africa， Nigeria and Ethiopia.

The first is to strengthen the exchange of governance experience and assist Africa in the preparation of regional， sub-regional， national and sector development plans to enhance Africas autonomous governance capacity. China should also strengthen the alignment of development strategies with the African Union and African countries， together develop and implement China-Africa cooperative project plans aimed at boosting Africas economic development.

The second is to help Africa cultivate economic governance talents through training. While training technical talents， China can also help African countries foster talents in economic management， finance， law and engineering through platforms such as the Academy for International Business Officials of the Ministry of Commerce， and help African officials and professionals understand Chinas experience of reform and opening up， the path of industrial transfer in China， Chinese local governments paths of undertaking industries， and the policies and financial services in the process of industrial transfer. To this end， China can first provide training for a batch of experts who command expertise on China and African policies， and turn them into expert trainers who are proficient in both Chinese experience and development strategies in Africa.

The third is to enhance the spillover effects of China-Africa economic cooperation on local Africa. In the phase of project design， we should consider the relevance between the industrial parks co-built by China and Africa and the local African economy， promote the development of local SMEs， boost localized full-value-chain development in relevant industries， and help with the construction of economic integration in Africa.

3. The “three-step” precise alignment of Chinas proposals and Africas strategies

President Xi Jinping pointed out at the Belt and Road Forum for International Cooperation in 2017 that “Belt and Road” construction is not meant to reinvent the wheel， but to complement the development strategies of countries involved by leveraging their comparative strengths. The necessity of drawing on Chinas development experience has become the consensus of African countries， and the key is how to align China's development experience with African countries development strategy. To be specific， the alignment of China-Africa development strategies can be achieved in three steps. The first step is to strengthen Chinas communication on development policies with African countries to understand their specific development strategies and needs， and help to shift China-Africa infrastructure projects from “request-oriented” to “demand-oriented” to meet the actual development needs of enhancing regional connectivity in Africa. The second step is to refine and summarize relevant experience of Chinas development out of Africas demand. The third step is to promote the alignment of Chinas development experience and African development strategy， which includes alignment with not only the development initiatives of the African Union， but also the strategies of African sub-regional organizations， African governments and sub-national governments.

4. Strengthening international coordination and cooperation

To ease western countries doubts about China-Africa cooperation and enhance the applicability of China's public goods to Africa， China can coordinate with western powers on the supply of public goods to Africa through tripartite cooperation. The first is to promote tripartite cooperation in the area of livelihood such as agriculture， medical care and youth training in Africa at the government level. The second is to promote the cooperation between Chinese enterprises and consultancy companies and investment and financing institutions from western countries that have international experience and are familiar with the local business environment in Africa to jointly carry out economic cooperation in the third-party markets in Africa. The third is to give full play to the role of think tanks， media， non-governmental organizations and other social forces， strengthen our communication with local Africa， establish mutual trust， and enhance the international communitys， particularly local Africas recognition of China-Africa cooperation projects to allay their doubts about China.

Conclusion

The supply of regional public goods to Africa is an important part of Chinas participation in international public goods supply. Chinas supply of regional public goods for Africa include both infrastructure projects that may enhance regional inter-connectivity and knowledge and experience that is conducive to Africa's autonomous and sustainable development. At present， there is a huge gap between supply and demand of public goods supplied to Africa， but western powers have a strong “privatizing” tendency， and are unable to provide public goods commensurate with Africas autonomous and sustainable development. As “the east is on the rise while the west is on the decline” and Africas consciousness of independent development has risen， China has ushered in a good opportunity in the supply of public goods to Africa. The adherence to the principle of pursuing shared growth through discussion and collaboration has broken the western hegemonic supply， and China has also become one of the few world powers with both the ability and the willingness to provide regional public goods to Africa. Faced with challenges such as project sustainability， coordination between the supply and demand sides， and competition from other suppliers， China can improve its supply of regional public goods to Africa by means of increasing the funding and operational sustainability of infrastructure projects， enhancing Africas capacity to provide regional public goods on its own， enhancing alignment of strategy with Africa and strengthening international coordination and cooperation. At the same time， China-Africa cooperation should continuously focus on enhancing Africas autonomous development capacity and helping African countries provide regional public goods on their own.