0:01

The China in Africa podcast is brought

0:03

to you in partnership with the

0:05

Africa-China Reporting Project at Wits University

0:07

in Johannesburg. The ACRP

0:09

promotes balanced, considered reporting on

0:12

China-Africa relations through training programs

0:14

held throughout the year. More

0:18

information at africachinareporting.com. Hello,

0:25

welcome to this special edition of the

0:28

China in Africa podcast. It's a special

0:30

edition because it's a mix of the

0:32

China in Africa podcast and the China

0:34

Global South project interviews where we receive

0:37

each week or each month we receive

0:39

an expert to talk about any specific

0:41

issue related to China engagement in the

0:44

Global South or China engagement

0:46

in Africa, Latin America, whatever, as

0:48

I say, in Global South. And

0:50

today I'm very pleased to receive

0:52

Zainab Usman. Zainab Usman was a

0:54

senior fellow and inaugural director

0:56

of the Africa program at the

0:58

Carnegie Endowment for International Peace in

1:00

Washington, DC. And

1:03

her expertise is into institution, economic

1:05

policy, energy policy and emerging economies

1:08

in Africa. Zainab, thank you for

1:10

being here with us in this

1:12

special edition of China in Africa

1:15

podcast. Hi, Gerald. Very

1:17

nice to be back on the

1:20

China Africa, China Global South project

1:22

podcast. That's a mouthful. Good

1:24

to be back. Exactly. So yes, it's

1:26

a China in the Global South, but we

1:29

still keep, we have the China Africa in

1:31

the China in Africa podcast and we have

1:33

the China Global South podcast. So we have

1:35

so many things to do. So before getting

1:37

into you, so this

1:40

week has been very interesting week

1:42

that's happening in China Africa specific,

1:45

China Africa space, because China is

1:47

appointed a new ambassador in South

1:49

Africa. The new ambassador in South

1:52

Africa, his name is Wu Peng.

1:54

Wu Peng is the African,

1:57

he was at least was a

1:59

former African. So

14:02

in more popular terms, discussions

14:04

around de-dollarization, no de-dollarization

14:07

happening on that front, but there

14:09

are certain interesting trends that we're

14:11

seeing. And then finally,

14:14

people-to-people ties, the basic

14:16

movement of people from Africa to

14:18

China, vice versa. So those

14:20

are the five areas we look at.

14:23

And then we kind of conclude on

14:25

the basis that because we

14:27

identified the state of play in

14:29

each of these five areas, and

14:32

then we identify trends where we're

14:34

starting to see certain kinds of

14:37

interesting shifts. We conclude on the

14:39

basis that the policies and decisions

14:41

that China takes, that

14:44

African countries take, and

14:46

very importantly, the third parties like the

14:48

US and Europe and the UK take

14:50

could all shape the direction of this

14:52

relationship between China and Africa. So that's

14:55

kind of basically what we do, and

14:57

I'm going to go into a little

14:59

bit more detail. That's very interesting.

15:01

You really gave us like the full spectrum

15:03

of the paper, the five areas that you've

15:06

examined into your paper. I'm going to put

15:08

the link down below after the show so

15:10

people can download and read the paper to

15:12

heaven, clear idea what the paper is about.

15:14

So when I read your paper, you went

15:17

in through three assumptions into building that argument.

15:19

The first of all, the first

15:21

one you mentioned it, China economy is

15:23

not in crisis, is not falling, it's

15:25

just in transition. There is a change

15:27

in terms of like we move from

15:30

the double digit growth to a

15:32

single digit, but we're still going to be

15:34

having that growth happening. And the

15:36

second assumption I'm going to read

15:38

here that the economic shift that

15:40

we're going to see in Chinese

15:43

economy are largely policy induced to

15:45

respond to China domestic challenge, including

15:47

its demographic transitions and to accelerate

15:49

its post-pandemic recovery. So when you

15:51

examine the five areas of your

15:54

research in those element, people to

15:56

people, investment, trade and everything, how

15:59

in those... That's

20:00

the state of play. Now, what are some of

20:02

the changes that we're seeing? One change,

20:06

at least that I saw in the data that

20:08

was quite striking to me, is

20:10

that the composition of Africa's

20:14

exports to China is starting

20:16

to change. In

20:18

certain cases, it will start to decline a

20:20

little bit. What

20:23

I mean by decline is when

20:25

you look at specifically oil exports

20:27

from African countries to China, and

20:29

we know a lot of African

20:31

countries, oil producers, have been exporting

20:33

unprocessed crude oil to China,

20:35

at least for the last two decades or

20:37

so. Oil exports from Africa

20:40

to China are declining as

20:42

China increasingly sources crude oil

20:44

from other parts of the

20:47

world, in particular

20:49

the countries, Arab monarchies and the

20:52

Persian Gulf, so the GCC countries

20:54

as they're called, from Russia and

20:56

then from other countries in Asia.

20:59

In fact, in the paper itself, there's this chart

21:02

that is quite striking that we have. I think

21:04

it's figure one that illustrates

21:06

what I just mentioned.

21:09

What you find is that

21:11

out of China's top 20

21:15

oil suppliers, across all of

21:18

the African countries, they have

21:20

seen a consistent decline in

21:22

their oil exports between

21:25

2019, right before

21:27

the pandemic, and

21:29

the year 2023. Whereas all

21:32

of the non-African, I think the

21:34

only exception here is Chad. I

21:37

think it's Chad because quite recently

21:39

they said in agreement that Chad

21:41

kind of started exporting oil

21:43

anyways. And then probably for the 2024

21:45

data, we're going to see Niger

21:48

also kind of bucking that trend,

21:51

right? Whereas for all of

21:54

the non-African oil exporters to

21:56

China in that list, their

21:58

exports exist. increased by an average

22:01

of 40%. And again,

22:03

it's consistent. In some cases,

22:06

you have large increases. We're

22:09

looking at what is it over 70%,

22:12

even for the US? Actually, over 100%

22:16

for the US, among a number of others.

22:20

So it's quite striking to see that. And

22:22

this is not a one off thing. It's

22:24

actually a trend. And when

22:26

you think about it, it's quite profound. Because

22:29

a lot of these countries have been

22:31

relying on China buying their crude oil

22:33

for the past, I would say, nearly

22:36

two decades or so. They're no longer

22:38

sending crude oil to China. And then

22:40

you really have to think about the

22:43

implications for their fiscal revenues and for

22:45

their economies overall. So for

22:47

me, this is something that I'm hoping or

22:49

that I was hoping that more policy

22:52

stakeholders, particularly on the African continent, will pay

22:54

it too. Yeah, let's

22:56

pause there for a moment. When I was

22:58

reading a paper, I was like, this question

23:00

just came into my mind. What can explain

23:03

that drop? Because we have a country like

23:05

Angola. Yeah, Angola has a huge loan to

23:07

China. It had 45 billion, now it's 10

23:09

to 18 billion. And Angola

23:12

has been paying its loan to China by

23:14

selling its crude oil to China. In 2002,

23:16

Angola, I think, was the

23:18

top two or top three China oil

23:20

supply. Over the years, Angola

23:23

just dropped. What happened there? Why

23:25

China has decided to stop to

23:27

buy its oil from Africa? Is

23:29

it because it's expensive, it's risky?

23:31

Or what? What explained

23:33

that? That's a very good question. I

23:36

don't entirely have a very

23:39

coherent response. And also

23:41

in the paper itself, we made

23:43

an editorial decision not to explain

23:45

the why. Explaining

23:47

the why itself could be a completely

23:49

different paper. It's another paper. It's like

23:52

there's a lot going on there. But we

23:54

just decided to, as a starting point,

23:56

present the data just so you know,

23:58

you even understand. that something is

24:01

happening, then the

24:03

next step is to explain the why. In

24:05

terms of explaining why this decline

24:08

is happening, one potential

24:11

explanation might be that there

24:13

are alternatives. China

24:16

has been strengthening

24:18

its relationship with countries in the

24:20

Middle East over the past couple

24:24

of years, and this accelerated really

24:26

from the pandemic era. If

24:29

you have various alternatives, sometimes it's

24:32

a political decision to buy from one

24:34

supplier rather than the other. They're

24:37

closed. Then the

24:40

production infrastructure

24:45

as well as the entire

24:47

ecosystem is a little bit more

24:49

stable and more predictable with some

24:51

of the countries of the Middle

24:53

East anyway. So, being the key

24:55

point here. Another element

24:58

could be that with a

25:00

lot of African countries overall,

25:02

they are also experiencing a

25:04

stagnation or decline in actual

25:06

production of crude

25:09

oil. So,

25:12

that is then perhaps reflected in

25:15

the decline in exports. So, there's production

25:18

to begin with, and then exports, which

25:20

is something else. So, even production in

25:23

a number of the countries, you

25:25

know, Libya, Nigeria, South

25:27

Sudan, Angola, across the

25:30

world, there's actually a stagnation or

25:32

decline in production. So, that might

25:34

also be affecting exports. But there

25:36

are also other explanations, and that

25:39

should be a separate conversation. I think I

25:41

might add to that the fact that on the other

25:44

hand, you have the decline in supply.

25:46

You also have an increase in China's

25:49

demand of oil as well. So, in

25:51

terms of quantity and what China expects,

25:53

I think it might be quite logical

25:55

to see China increasing its import from

25:58

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