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September 26, 2020
Analysis Cover

Africa: new battle ground for Sino-US face-off

 

From the very beginning, Donald Trump’s election campaign for the US presidency, almost four years ago, has targeted one nation— China—as the source of most of his country’s economic problems. Candidate Trump frequently pointed out what he argued to be a very uneven and unfair trade relation the US has had with its major trade partner and the second largest economy in the world, China. In fact, Trump’s presidential campaign slogan—Make America Great Again—which later come to encapsulate the whole theme of his administration, is partly build on this concept of “pushing back on the Chinese aggressive economic policy”.

If there is one thing that is consistent about the 45th president of the Untied State of America it is that his commitment to deliver on his campaign promises is unwavering. After assuming the presidency, Trump disproved many political commentators by going aggressively against China and make a point about what he has spoken about in his campaign trail was not just him bluffing to win the election, but an actual political belief that he holds.  The US president, indeed, kept the game on China. Slowly drawing the giant from the east to a never been seen trade war and economic rivalry.  The tug of wars between these big powers is starting to be felt by the rest of the global economic community, which has a strong economic link to either/both of these economies.

In this regard, the latest victims of this economic confrontation are no doubt the developing world, experts say. True to form, the two have dragged Africa to this toxic rivalry, in recent months, making the continent the next battleground for economic supremacy.

During the 2016 election campaign, Trump was able to sell his “America First,” and “Make America Great Again” political mantras that greatly contributed to his win. The fact that many Americans were in the mood for change did not hurt either.

Trump, from the outset, did not shy away from chastising US companies that have investments and operational bases in China, arguing that they have to bring back the jobs they have outsourced elsewhere. He openly urged them to reconsider their strategy. The rift with China intensified over the course of the three years to the point where it comes to be referred to as an all-out trade war.

Experts across international organizations have voiced their concerns that the so called trade war between the two giants will only hurt the disadvantaged economies of the world. In fact, the trade war between China and the US was not merely started with Trump coming to the Presidency. Either was not intensified by his inflammatory rhetoric tweets.

According to literature, trade wars occur when two countries, in this case the United States and China, do not back down from their position of wanting to inflict economic harm on one another using various instruments. Almost always tariffs are the instruments of choice.

Experts suggest that US’s Trade Law Section 301 enables the United States to extract unilateral trade concessions from its partners by threatening to impose trade retaliation if the targeted countries do not open specified markets to American exports. That pretext has been utilized on a number of occasions and countries. For instance, South Korea was forced to abide by this US law that was enacted only one year after the formation of the World Trade Organization (WTO) and grant better access to its pork and beef markets to the US. Since then, the country (South Korea) had agreed to drop most of its shelf life and temperature requirements on imported meat products.

But that seems not to work with China. The leeway Korea, Taiwan or others had shown in negotiating trade deals favoring the US, probably didn’t work out with China.

Analysts suggest that though Section 301 of the 1974 Trade Act gave the US presidents the power to combat “unfair” foreign trade practices via retaliatory measures, if need be, this provisions were seldom activated except the current president. Trump didn’t hesitate to enforce and reinforce retaliations, however.

In 2018, this much discussed war started with both sides slapping each other with hefty tariffs on products. It was not secret that the US wanted to have more access in the Chinese market. The tariff measures landed on commodities worth USD 200 billion, according to estimates.

Violating the WTO rules, which has the mandate on tariffs and trade competition, the US triggered the first tariff impositions and on June 15, 2018. In this regard, the U.S. government released a list of goods subject to the new tariff schedule, which includes the
imposition of a tariff of 25 percent on goods imported from China valued at about USD 50 billion. The next day China imposed additional 25 percent tariff on more than 500 products from the US, valued at USD 34 billion.

The ‘tit for tat’ went on until both countries have reached at a point that doesn’t really work for either side. Just when the trade war seemed to be subsiding, the US wanted to retaliate by attacking one of the Chinese telecom giants, Huawei. The US went as far as detaining the global CEO of the telecom company by accusing the company of involving in espionage. The 5G network contract which was about to be sign was canceled, abruptly. The US was persuading the likes of UK to reconsider similar deals with Huawei.

In fact, China was massively accused of spying not only on the US and Europe. One particular popular incident involved the African Union (AU) Commission. The Addis Ababa headquartered and the newly built AU Commission edifice required an investment of USD 200 million, which was provided by China as a grant as a token of friendship between themselves and the AU. Reports suggest that between 2012 and 2017 China was bugging the AU headquarters. China denies it from the outset.

The US was open in denouncing China and its role in Africa for economic controls. In its economically and politically gauged accusations, the US has been active in belittling China’s extended credit-based investment in Africa. Many commentators, however, believe that China has defeated the West in Africa. China’s money has helped to facilitate the defeat with massive hardware infrastructures. Highways, railroads, dams, airports, ports, factories and a number of those sorts of things have been built in Africa, which the westerns couldn’t do.

When a US official realized that China is overtaking the dominance the US used to have on Africa, they didn’t hesitate to pressure African governments, to shade off some of these influences. For instance, Rex Tillerson, former secretary of state, while visiting Addis Ababa together with Nairobi, Djibouti, Lagos and N’djamena, warned that China is overwhelmingly indebting Africa. Though he was fired with his shortcut visits, the idea that China is dominating and controlling Africa has been reverberated with the coming of the former CIA director and the current State Secretary Mike Pompeo.

In fact the US has never been short of issues to condemn China over; and its relation with Africa is just one strand of this. At this time, with the storms of COVID-19 pandemic, the Center for Disease Control Prevention (Africa CDC) has become the new battleground for US-China face off, experts attest. Africa’s CDC is about to erect its new headquarter in Addis Ababa with a USD 80 million Chinese grant. That triggered the US to voice concerns and to look for potential substitute countries to host the headquarters. The US is looking at those countries such as Morocco or Cote d’viore as long as China is not involved in whatsoever I am doing.

The fear that the US has over China is the fact that focusing on health sector, is on the basis of both fear and market dominance for pharmaceuticals. For Costantinos Berhe (PhD), senior policy expert and public policy professor with Addis Ababa University (AAU), the trade war between the US and China will not necessary impact Africa. However, with the coming of China to invest in the health sector, it is natural that a fear factor is there for the US for two reasons. For one thing, the US fears it may not have access to Africa’s health related research and development activities across the continent. The second concern the US has is related to the potential market takeover by China for traumatic and healthcare products that Africa needs to buy.

Similarly, Gedion Gemora, a south-south senior consultant who currently runs Center of Excellence International Consult as CEO, believes that China is not here for free, either. Despite its giant contribution to Africa’s growth in the developing infrastructure, China is also looking into securing a market and resource bases. Yet, China has accumulated huge debts and to some extent if those debts are funneled to personal coffers of authorities that will be a major blow that could tangle both China and the fund receiving African countries.

While CIVID-19 is taking its toll in Africa with more than 280,000 cases, China stood up to help Africa more than what the US had offered, Constantinos argues. He explains some of the showcases China have displayed to stretch a helping hand. It has announced debt reliefs in addition to helping Africa CDC to realize its headquarters. At the same time, the UK government has announced it will reconsider and halt some USD three billion birr worth of assistance out of which half presumably remaining within the UK.

With the gradual retreat of the US from the global leadership, as the US has blackout from the UN systems and numerous international agencies with the recent being World Health Organization (WHO), China on its part seems speeding its super dominance with its ambitious Belt and Road Initiative that looks at adjoining 70 countries around world. Europe is no exception while African and Asian countries, predominantly the ASEAN region is currently under the heavy influence of China, as the Trump administration chose to the path to de-globalization, Constantinos argues.

With China’s growing machismo, no either way for Africa to remain neutral as both Costantinos and Gedion explained. While Gedion believes Africa is trapped within the growing tough external forces competition, for Costantionos, the continent now has entered into a stage of political war that China and the western world are conducting, the US slowly losing it all.

 

The article first appeared on The reporter

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