China’s Expanding Influence in Africa: The Role of the Belt and Road Initiative and the FOCAC Summit10/25/2024
 @Oleg/Adobe Stock Introduction In the past two decades, China has become the top bilateral trading partner for sub-Saharan Africa. The International Monetary Fund (IMF) reports that China accounts for about 20% of the region’s exports and 16% of its imports.[1] In 2023, trade between China and Africa reached a record $282 billion.[2] Africa primarily exports primary commodities—metals, minerals, and fuel—making up roughly 60% of total trade, while 94% of Africa's imports from China are manufactured goods, including telecommunications equipment and textiles.[3] Economic cooperation continues to strengthen through the Forum on China-Africa Cooperation (FOCAC) and the Belt and Road Initiative (BRI). FOCAC Summit The FOCAC is a partnership platform initiated by Chinese President Xi Jinping to enhance understanding, build consensus, strengthen friendships, and promote cooperation between China and African nations. Since its inception in 2000, the FOCAC Summit has been held every three years and is a key component of China’s diplomatic strategy toward the Global South, showcasing its commitment to supporting developing nations. Through this forum, China seeks to reshape global trade and geopolitics to increase its influence compared to the United States and its allies. Beginning with the 2003 summit, China has gradually expanded preferential tariffs for African countries, reaching zero tariffs on 98% of trade from 33 African nations by 2023.[4] China has also initiated programs to aid in the development of infrastructure. For example, in 2006, China announced the establishment of ten Agricultural Technology Demonstration Centers, later increased to thirty in 2009, throughout Africa to support Africa’s agricultural modernization in collaboration with the UN Food and Agriculture Organization (FAO). That year, China also introduced a $5 billion China-Africa Development Fund to facilitate infrastructure building in Africa, including the development of six special economic zones in five countries: Zambia, Nigeria, Ethiopia, Mauritius, and Egypt.[5] In 2023, Xi pledged $50.6 billion in new financing over the next three years, emphasizing a shift from investments in infrastructure projects to initiatives that support local manufacturing and exporting opportunities from Africa.[6] The Belt and Road Initiative In 2013, President Xi introduced the BRI, which aims to enhance regional connectivity and embrace a brighter economic future by building infrastructure and broadening trade links across Asia, Europe, and Africa. The BRI provides funding to Africa and countries in other regions. By the end of 2023, over 200 BRI cooperation agreements have been signed with more than 150 countries across Asia, Africa, Europe and Latin America and thirty international organizations. By funding infrastructure projects in developing countries, China aims to benefit from increased trade facilitated by new infrastructure, be strategically less dependent on sourcing materials from the United States and its allies, and establish alternative routes for transporting natural resources.[7] For several years, China prioritized large-scale infrastructure projects, including the Standard Gauge Railway in Kenya and the Addis–Djibouti Railway in Ethiopia. According to the Global Development Policy Center of Boston University, nearly $170 billion has been lent to African countries from Chinese financial institutions between 2000-2022. (In recent years, lending has been at lower levels than what was seen in the 2010s.[8]) Global Perspectives on BRI Despite its popularity in developing nations, the BRI has faced criticism from leaders of advanced economies. One major concern is the initiative's lack of transparency, making it difficult to ascertain details about the loans, including their amounts, terms, contractor selection, and associated environmental and social risks.[9] China has been accused of engaging in "debt-trap diplomacy," where it imposes high-interest debt on countries that struggle to repay, thereby gaining leverage over them. In May 2019, then-U.S. Secretary of State Mike Pompeo criticized China for using "corrupt infrastructure deals" to gain political influence and for employing "bribe-fueled debt-trap diplomacy" that undermines good governance.[10] UNCTAD recently reported that 24 African countries have public debt exceeding 60% of their GDP, and twenty African nations face debt servicing costs that surpass 10% of their revenue.[11] Yet, numerous African leaders, politicians, and business elites have publicly challenged the narrative of “debt-trap diplomacy” and praised China’s development model to both Chinese and international audiences.[12] The Next Chapter in China-Africa Economic Relations Despite criticism and concerns regarding power imbalances and China's underlying motivations by Western countries, China continues to show commitment to strengthening ties with African nations through ongoing dialogue of the FOCAC summit and through BRI. In a 2025-2027 action plan released on 5 September, Chinese and African decision makers said they would “keep the global industrial and supply chains stable and smooth, oppose all forms of unilateralism, protectionism, and maximum pressure, and oppose erecting walls and barriers, decoupling and supply disruption”.[13] As China’s strong presence in African trade grows, the United States may risk losing opportunities with a region that is expected to be one of the quickest-growing economies in 2024.[14] Africa is not only a large source of raw materials for many manufacturers but a growing consumer market for exports. Many U.S. politicians, including U.S. Senators Chris Coons (D-DE) and James Risch (R-ID), have advocated deepening trade relations with Africa by supporting aid programs along with strategic partnerships and investments, such as the African Growth and Opportunity Act (AGOA), the Generalized System of Preferences (GSP) and Kenya Strategic Trade and Investment Partnership. In this evolving landscape, the U.S. faces the challenge of developing a coherent strategy to engage with African nations while addressing competition from China. To remain relevant, it must strengthen existing frameworks and adapt to Africa's changing needs. By fostering equitable partnerships and prioritizing sustainable development, the U.S. can build meaningful relationships in Africa and maintain its influence amid China’s growing presence.[15] The future of U.S.-Africa relations will depend on a collaborative approach that acknowledges Africa’s agency and potential as a key global player. Kayleigh Park [email protected] [1] Blanchard, B. (n.d.). China says 'fed up' with hearing U.S. complaints on Belt and Road. [2] Nyabiage, J. (n.d.). China-Africa trade hit US$282 billion in 2023 but Africa’s trade deficit widens, with commodity prices a key factor. [3] Boston University. China-Africa Economic Bulletin, 2024 Edition. [4] Yeping, China to give LDCs including 33 African countries zero-tariff treatment, move to boost trade prosperity. [5] Nanlu, L. (2015). Issue Brief . Beijing: United Nations Development Programme. [6] Dodwell, D. (n.d.). China-Africa summit a fitting showcase of Global South’s rise. [7] Li, Hackenesch. (n.d.) FOCAC 2024: Moving Away from Large Infrastructure Deals towards Normative Power of China. [8] Moses, O. (n.d.). 10 Charts to Explain 22 Years of China-Africa Trade, Overseas Development Finance and Foreign Direct Investment. [9] Christian Shepherd, V. C. (n.d.). China hosts African leaders to rekindle ‘Belt and Road’ outreach. [10] Blanchard, B. (n.d.). China says 'fed up' with hearing U.S. complaints on Belt and Road. [11] Dodwell, D. (n.d.). China-Africa summit a fitting showcase of Global South’s rise. [12] Cash. China is not pushing Africa into debt trap, South African president says. [13] Embassy of the People’s Republic of China in the Republic of Rwanda. The Characteristics of Chinese Path to Modernization [14] African Development Bank Group. Africa dominates list of the world’s 20 fastest-growing economies in 2024—African Development Bank says in macroeconomic report. [15] Léautier. In brief: The future of US-Africa trade and investment  © Andrey Sharpilo/Shutterstock Navigating the Future: International Trade and Sustainable Port Infrastructure
Ports are the backbone of global trade, serving as vital hubs where goods from around the world converge and disperse. However, amidst their critical role in facilitating economic growth, ports also exert a significant environmental footprint which is coming into increasing focus as consumers favor a greener economy, and companies and governments alike react to these changing consumer demands.[1] This blog delves into the evolving landscape of international trade through the lens of sustainable port infrastructure and technology, exploring how innovation and collaboration are reshaping this cornerstone of global commerce. Importance of Ports in Global Trade and Environmental Challenges Seaports are gateways where ships, trucks, trains, and cargo converge, facilitating the movement of goods across continents. Seaports play a pivotal role in the interconnected network of global trade, particularly since the advent of containerization and globalization. In 2022, global containerized trade volumes reached 163 million 20-foot equivalent units (TEUs).[2] Additionally, seaports around the world manage approximately 80% of worldwide commerce in terms of volume and 70% in value terms.[3] Given the outsized role of seaports in global supply chains, it is important to consider their environmental impact.[4] In 2019, the largest three ports in the United States (Port of Los Angeles, Long Beach and New York and New Jersey) accounted for over 2.5 million tons of carbon dioxide equivalent emissions (CO2e).[5] This is equivalent to 595,005 gasoline-powered passenger vehicles driven for one year. [6] These emissions stem from various port activities including cargo handling, storage, and land transport. In terms of the impact of port activities on nearby communities, the U.S. Environmental Protection Agency (EPA) estimates that more than 39 million people in the United States currently live near ports; these people can be exposed to air pollution from diesel engines at ports and be at risk of developing asthma, heart disease, and other health problems.[7] Additionally, waterways and nearby communities also face significant impact by port activities. Ranging from wastewater released by ships to the pollution of water systems from oil spills or leaching of toxic paint additives from ship paint can cause health impacts on marine life and communities around ports. [8] Innovative Solutions Transforming Port Operations Advancements in technology offer promising solutions to mitigate these environmental impacts while enhancing operational efficiency:
Policy Considerations Achieving greater sustainability in international trade also requires the correct policy aimed at balancing growth with environmental stewardship.
By harmonizing minimum standards, providing financial incentives, promoting collaborative partnerships, and undertaking environmental assessments, policymakers can effectively steer ports towards a sustainable future. Conclusion Sustainable port infrastructure and the use of advanced technology are pivotal in mitigating the environmental impact of global trade while fostering economic growth and connectivity. By embracing renewable energy, digitalization, and smart port solutions, ports can enhance operational efficiency which can lower costs and expedite the movement of goods while reducing emissions and promoting environmental stewardship. Continued investment in green infrastructure and collaborative partnerships will be essential in navigating the complexities of international trade sustainably. As global trade continues to evolve, ports must be part of that evolution, demonstrating that growth and infrastructure needs can coexist with environmental responsibility in our interconnected world. [1] Sustainability as an integral part of trade compliance Deloitte [2] Review of Maritime Transport UNCTAD (2023) [3] Implementing Onshore Power Supply from renewable energy sources for requirements of ships at berth Applied Energy Volume 225 (1 December 2019) [4] Port sustainability and performance: A systematic literature review Transportation Research Part D: Transport and Environment Volume 72 (July 2019) [5] Issue Brief: Climate Change Mitigation and Adaptation at U.S. Ports Environmental and Energy Study Institute (2022) [6] Greenhouse Gas Equivalencies Calculator Environmental Protection Agency (12 March 2024) [7] National Port Strategy Assessment: Reducing Air Pollution and Greenhouse Gases at U.S. Ports U.S. Environmental Protection Agency (September 2016) [8] Ports Primer: 7.1 Environmental Impacts Environmental Protection Agency (14 December 2023) [9] Ocean waves to generate power at the Port of Los Angeles American Society for Civil Engineers (8 February 2023) [10] Greenhouse Gas Study International Maritime Organization (2020) [11] The Digital Port Port of Rotterdam [12] Role of a digital twin to improve the design and operations of ports Royal Haskoning DHV (7 August 2023) [13] Shore Power Port of Vancouver [14] Improvement of the sustainability of ports logistics by the development of innovative green infrastructure solutions Transportation Research Procedia Volume 45 (2020) [15] Partnerships and Projects International Maritime Organization [16] Member States International Maritime Organization  TradeMoves is headquartered in Maryland, and the collapse of the Francis Scott Key Bridge in Baltimore in March was a stark reminder of the importance of port and transportation infrastructure not only to cross-border trade but to the local economy. This blog touches on both.
Maryland’s Port of Baltimore is a major trade hub for the United States as it is the ninth-largest port by volume and value and the third-largest on the East Coast as of 2023.[1] The port handled a record amount of cargo valued at $80 million and was the nation’s top port in the trade of automobiles, farm machinery, and sugar.[2] The port directly creates 15,000 jobs and generates $4.7 billion for Maryland.[3] The collapse of the Francis Scott Key (FSK) Bridge in the Port of Baltimore has already impacted the movement of goods domestically, as the cleanup and unloading of the Dali containership that crashed into the bridge is still in process with the soonest expected reopening date for the port being the end of May.[4] Overall, the closure of the port amplifies supply chain disruptions already caused by external factors, such as geopolitical developments and labor strife. Rerouting of Trade Collapse of the FSK bridge initially caused 10 ships to be stuck in the Port of Baltimore and forced other ships waiting outside to reroute to different East Coast ports, including Norfolk and New York/New Jersey.[5] The director of the Port Authority at the Port of New York and New Jersey indicated the port is now handling about two-thirds of Baltimore’s container business.[6] Rerouting of shipments may be longer term as the bridge cleanup and reconstruction process is expected to be lengthy. Some companies may even reroute to ports on the West Coast. As in the case of most trade disruptions, redirection of trade is expected to cause delays in delivery time and increased costs. Rerouting of goods also increased the use of other modes of transport including railways and trucking. A new CSX freight rail route is facilitating the movement of diverted containers from New Jersey/New York to Baltimore. Norfolk Southern announced a route to carry diverted freight between the Elizabeth Port in New Jersey/New York and the Seagirt Marine Terminal in Baltimore.[7] This will be a factor in the increased cost of goods as “in most cases, the companies that own the goods will be responsible for the cost of bringing them to Baltimore by truck or rail from the new destination port.”[8] Some U.S. industries have been impacted more than others, but quick action and workarounds have minimized significant trade contractions. The Port of Baltimore is the second largest U.S. export hub for coal following Hampton Roads port in Norfolk, Virginia. In early April, following the port closure, the U.S. Energy Information Administration (EIA) forecasted a 5.3% annual decline in coal exports compared to 2023, a significant setback from 1% growth anticipated earlier by EIA. In rerouting coal shipments to alternate ports, including nearby Norfolk, and progress towards resuming trade via Baltimore, the EIA adjusted its forecast to 1.1% decline.[9] While this setback hit regional coal exporters in Appalachia, the disruption to U.S. coal exports has not significantly impacted coal prices as Baltimore exports less than 2% of global seaborne coal.[10] Potential Increase in Controls and Auditing In 2023, the port imported $58.8 billion worth of goods and exported $21.9 billion.[11] Zaili Yang, a Professor of the Maritime Transport at Liverpool John Moores University, anticipates the impact on global supply chains will be minimal as one port shutdown is not as integral as closures/delays in major shipping routes like the Suez Canal or Panama Canal. Zaili Yang anticipates the bigger impact will be on implementation of preventative initiatives to reduce the risk of similar bridges collapsing through anti-collision measures by regulatory bodies, such as the International Maritime Organization, and bridge structure inspection and reinforcement by domestic transport authorities.[12] In addition, there may be further development of U.S. regulations on the mandatory use of tugboats near important infrastructure. If regulations like this do come into fruition, added costs imposed on the shipping industry and passed through to customers is anticipated.[13] Future Outlook The bridge collapse is an example of unforeseen risk that can occur at any port and highlights the importance of continuous regulatory improvements to mitigate infrastructure impediments, and government-led investment in projects which promote trade flow diversification. It is also a reminder as to why companies should continue to prepare for unexpected disruptions and build supply chain resilience through preemptive planning and strong communicative relationships with relevant parties, including customs brokers, carriers, suppliers and customers, especially in a time when trade disruptions at ports and trade routes are caused by a plethora of issues ranging from geopolitics to environmental changes. Supply chain resilience strategies include supply chain mapping, audits, diversification, scenario planning and the leveraging of technology. Return to normalized trade in the Port of Baltimore is underway through the opening of temporary alternative channels in the port and the anticipated opening of the main channel within the next few weeks.[14] In the near future, the United States could experience further trade disruptions at East Coast and Gulf Coast ports caused by labor strife could intensify and expand the impact of trade disruptions as the International Longshoremen’s Association’s six-year contract with the U.S. Maritime Alliance, which represents port terminal operators and ocean carriers on the East Coast, expires at the end of September and negotiations are starting.[15] As seen last year during the West Coast labor dispute, this may result in a period of suspended trade operations at certain ports. It is encouraged that importers and exporters continue to monitor the news for developments in trade. [1] 2023 Foreign Commerce Statistical Report Maryland Port Administration [2] Port of Baltimore Government of Maryland [3] How Baltimore’s Key Bridge collapse will affect supply chains and the economy PBS (28 March 2024) [4] Shipping giant Maersk says Baltimore port reentry decision is near as collapsed bridge cleanup progresses CNBC (7 May 2024) [5] How Baltimore’s Key Bridge collapse will affect supply chains and the economy PBS (28 March 2024) [6] Trains, Trucks and Tractors: The Race to Reroute Goods From Baltimore New York Times (17 April 2024) [7] CSX completes first diverted cargo shipments on new rail line for Port of Baltimore CNBC (4 April 2024) [8] Baltimore braces for economic hit amid fears port shuttered for months The Washington Post (31 March 2024) [9] Reuters Events: CSX fully resuming Baltimore coal exports this week, CEO says Reuters (22 May 2024) [10] Baltimore bridge collapse: Coal exports likely to be blocked for weeks Business Standard (27 May 2024) [11] 2023 Foreign Commerce Statistical Report Maryland Port Administration [12] Baltimore bridge collapse sparks trade disruption with unusable port – what economic impact will it have? The Independent (2 April 2024) [13] Baltimore bridge collapse reveals a critical gap in federal government’s port protection powers CNBC (2 April 2024) [14]Deepest open channel yet gives larger commercial vessels access to Port of Baltimore CBS (21 May 2024) [15] Strikes at East Coast, Gulf ports are a big labor risk this year, and trade diversions have already started CNBC (7 March 2024) |
|
|
|
|
