Why is China Interested in Africa’s Ports?

08 Oct, 2021    ·   5790

Rahul Karan Reddy analyses the economic and geopolitical drivers that make African seaports critical to the success of Beijing’s Maritime Silk Road (MSR) initiative

Ports are critical to the success of China’s Maritime Silk Road (MSR) initiative, linking the mainland to large and untapped markets across the Indian Ocean. Beijing’s extensive investments in Africa’s seaports are driven by a blend of lucrative commercial opportunities and compelling economic challenges. These seaports also offer the Chinese military the capacity to project power across the Indo-Pacific through a range of military operations: anti-piracy, disaster relief, drills, and exercises. China’s unchallenged success in securing contracts to build, finance, or operate Africa’s seaports amplifies its economic and politico-military influence in the continent.

This influence was demonstrated most recently in June 2021 when Tanzanian President Samia Suluhu Hassan announced that negotiations with China Merchant Holdings for the construction of the Bagomoyo port had been revived. The stalled project was resumed by the newly-elected president five days after a phone call with Chinese President Xi Jinping. Bagomoyo is only one of 46 existing or planned port projects in Africa that China has invested in. Interest in such port infrastructure is motivated by commercial opportunities to cement Beijing’s role as Africa’s leading trade and development partner, as well as the prospect of enhancing its power projection capabilities in the Indo-Pacific.

Economic Drivers: Market Access for Exports, Imports, and Offshoring Excess Capacity

MSR investments focus on Africa’s ports to enable the export of Chinese goods into the continent. China has been Africa’s largest trading partner since 2009 and its exports have grown from 4 per cent of Africa’s imports in 2001 to 16 per cent by 2018, at a compound annual rate of 19 per cent. Port investments aim to improve capacity, reduce congestion, and upgrade infrastructure, which ultimately improves China’s access to Africa’s commercial markets. They extend China’s sizable commercial footprint in the continent, where trade growth is likely to be the strongest in the coming years. For Beijing, the importance of port investment in Africa is heightened by the rising hostility towards Chinese exports in Europe, the US, and parts of Asia. Its port projects are also accompanied by favourable business environments and terms of trade for Chinese businesses that look to avoid the political entanglements of developed markets. Ports are the main arteries of global trade supporting China’s economic pivot to emerging foreign markets.

Ports in Africa are intended to reduce Beijing’s reliance on volatile markets for raw materials and energy resources as well. The country’s growing appetite for energy resources requires the development of port infrastructure that will diversify its import of oil and gas away from the volatile West Asia to relatively stable markets in Africa. Given China’s massive investments in Africa’s mining and energy sectors, ports are also crucial for the seamless extraction of minerals and resources like copper, phosphate, lithium, iron ore, and gold back to the mainland. Securing uninterrupted supplies of critical raw materials is essential for China’s hi-tech ambitions and continued economic growth.

Finally, the push to develop ports in Africa functions as a release valve for China’s construction and machinery sectors that suffer from overcapacity in the mainland. Giant state-owned enterprises (SOEs) like China Merchants Group, China Harbor Engineering Company, and China Communications Construction Group have saturated the domestic market and are now looking to export their industrial capacity to emerging markets. Africa’s capital-scarce countries with poor quality port infrastructure are ideal markets for the export of China’s port-led development model, which only reinforces the perception of Beijing as a lucrative trade and development partner.

Geopolitical Drivers: Power Projection, Blue Water Ambitions, and Mitigating the Impact of Conflict

As China’s economic interests expand and become enmeshed in Africa’s local and regional security environments, the former’s military footprint is expected to expand. The People's Liberation Army Navy’s (PLAN) logistics support base in Djibouti is only the first sign of an enhanced military presence along strategic sea lines of communication (SLOCs). As the importance of SLOCs continues to grow, Beijing will be driven to search for similar arrangements across Africa and the Indian Ocean.

In May 2021, Gen Stephen Townsend of the US Africa Command (AFRICOM) warned that China has already approached numerous coastal African states to establish a naval facility. Acquiring facilities to repair and re-arm warships for out-of-area operations could be critical in the event of a conflict or blockade that threaten Beijing’s maritime-economic interests. In April 2021, China completed construction of a pier large enough to accommodate an aircraft carrier at its naval base in Djibouti, indicating a readiness to enhance its power projection capabilities.

Such naval facilities along with ports also offer Beijing the capability to conduct a range of military operations that enhance power projection capabilities: anti-piracy operations, humanitarian and relief efforts, and peacekeeping operations. For instance, PLAN conducted non-combatant operations in Libya (2011) and Yemen (2015) that involved the evacuation of hundreds of Chinese and foreign nationals. China is also expanding its military presence through joint drills and bilateral exercises with African states. In 2019, China, Russia, and South Africa conducted the first ever trilateral exercise among the three countries to “enhance interoperability and maritime security.” Such exchanges have significant implications for Indo-Pacific security and are likely to intensify as Beijing’s economic footprint expands across Africa.

Rahul Karan Reddy is a Research Intern with IPCS’ China Research Programme (CRP).