US-China rivalry ‘gives Africa options’

17 March 2011

The increasing competition between the US and China to be Africa’s leading trade and development partner presents the continent with better strategic options, according to Standard Bank Group’s latest economic strategy report.

But the report cautions African governments against using “outdated models that place ideology ahead of commerce” when engaging the two economic giants, and suggests that Africa strive for balance rather than choosing between the two.

The paper, “China and the US in Africa: Measuring Washington’s response to Beijing’s Commercial Advance”, was written by Standard Bank Group research analysts Simon Freemantle and Jeremy Stevens.

Africa’s new position of influence

The report notes that the tussle between the world’s two largest economies has elevated Africa to a new position of influence as a much-sought-after market, and offers some perspectives on how the continent can use this status best to unlock its potential.

It argues that while China’s rise might have overtaken the USA in Africa, there are merits in engaging with both countries and capitalising on the frictions between them.

China’s rise as new global pole of influence should be seen as supplementing rather than replacing the role of the continent’s traditional trading partners, such as the USA.

“The relative and varied merits of engaging with both must be measured and capitalised on,” the report states. “African states must engineer a new foreign policy based on this understanding, balancing rather than selecting between the USA and China.”

Relationship with USA still a benefit

The USA is still a major importer of African goods and private development assistance to African states, and African countries still stand to benefit from strengthening their longstanding relationship with the US, which still the world’s most powerful economy.

The report notes that while China’s rise has been sufficiently swift to eclipse the USA in Africa, “African states must remain acutely aware of the separate benefits to be gained from seeking deeper alliances with the world’s most powerful economy.

“It is an oddity of economic commentary that the importance and size of the USA economy is downplayed,” the report says. “The USA economy is nearly three times the size of China’s. It should be no surprise that the world’s largest consumer is also Africa’s largest export destination.”

The report points out that the USA is also a substantially more profound importer of African goods. In addition, US state and private developmental assistance to African states on occasion provides crucial support for socio-economic prosperity.

“For Africa, there are clear advantages in maintaining intimate ties with the US,” the report states. “Small successes in AGOA (the Africa Growth and Opportunity Act) show that African nations can secure access to US consumers.

“Meanwhile, the USA remains the continent’s most profound export partner, and a vital, and rising, source of investment to fuel the continued unlocking of the African consumer vista.”

SAinfo reporter