Annalena Baerbock travels to Ethiopia and encounters China’s influence there

But when Baerbock reached Ethiopia, one of her counterparts was already there: The new Chinese Foreign Minister, Qin Gang, arrived in the country on Tuesday for a visit. On that day, Baerbock traveled to Kharkov, Ukraine, which was hit by Russian attacks, to see for himself, but also to draw attention to the continuing dramatic situation of the people there.

And while Baerbock’s trip to Africa ended on Friday, Qin Gang continued to fly: His tour of Africa lasted until January 16th, taking him not only to Ethiopia but also to Gabon, Angola, Benin and Egypt.

Germany has been heavily involved on the African continent for decades. But China knows better how to market its engagement to the African heads of state. In addition, Beijing is more offensive in representing its own interests towards the states.

The Chinese foreign minister made no small promises during his visit to Africa. “Let’s do more to improve and promote Sino-African cooperation,” Qin Gang said during his speech at the African Union headquarters in Addis Ababa on Wednesday. “Africa’s needs are the priorities of Sino-Africa cooperation,” Qin Gang said.

Baerbock will also meet with the heads of the African Union (AU) commission on Friday. Even if the AU does not exert nearly as much influence in Africa as the EU does in Europe, the association with 55 member states is considered a key player on the continent. But China’s influence is omnipresent here too: the imposing main building with the plenary hall was a gift from Beijing.

The competition for Africa as a business location is very evident this week. In recent years, China has massively expanded its presence on the continent. Beijing has been financing infrastructure projects worth billions on the continent through its controversial Silk Road Initiative (BRI) for years – according to a survey by the German foreign trade promotion agency GTAI, 140 BRI projects were approved in Africa in the first half of 2022 alone. They are usually carried out exclusively by Chinese state-owned companies, and financing is largely provided by Chinese loans.

China uses development aid specifically for its own interests

Researchers at the Kiel Institute for the World Economy (IfW) recently showed that China apparently links the delivery of relief goods to African countries to how politically inclined the Chinese government is. According to the researchers, the more relief supplies flow into a country the more politically it is in line with China. This has very concrete consequences on the international stage: it is striking how often African countries vote in favor of China at the UN General Assembly.

The USA and Europe want to counter this. US President Joe Biden met the heads of state and government of several African countries in Washington in mid-December. The federal government also wants to do more to win over the African states. At the end of January, the Development Ministry will present the new German Africa strategy, the contents of which were previously reported by the Handelsblatt.

>> Read here: That’s in the German government’s new Africa strategy

The paper should also serve to highlight the advantages of cooperation with Germany, because the African countries can now choose from a large number of potential partner countries, it says. The strategy mentions Russia, Turkey and the Gulf States here, but above all: China.

German industry should also get more involved – for its own benefit. So far, the involvement of German companies in Africa has been manageable. According to the latest data from the Bundesbank, the stock of German direct investments on the continent in 2020 was just around twelve billion euros. For comparison: German direct investments in the USA amounted to 353 billion euros.

>> Read here: “We have to listen to each other” – Germany is struggling for a new relationship with Africa

But the German economy’s view of the continent is becoming more optimistic. According to a survey of more than 3,100 member companies of German chambers of commerce abroad, delegations and representative offices in autumn 2022, expectations for the development of their own business are even more positive than the global average. More than half (52 percent) of German companies in Africa expect better business development in the next twelve months, worldwide it is 37 percent.

German companies could play a bigger role

German business welcomes Berlin’s commitment to the region and its efforts to catch up with China. “China recognized long before Germany that Africa’s population growth, abundance of raw materials and economic growth represent enormous opportunities,” said Christoph Kannengiesser, CEO of the German-African Business Association, the Handelsblatt.

China is pursuing strategic economic and political interests in Africa. “These are being promoted with a high degree of political support and generous financing for Chinese companies,” says Kannengiesser.

Chinese companies are particularly dominant in Ethiopia’s special economic zones. “But German companies could also play a bigger role here,” says Kannengiesser.
With 120 million inhabitants, Ethiopia is one of the most important future markets in Africa, says Volker Treier, head of foreign trade at the German Chamber of Commerce and Industry, the Handelsblatt. “Even if our companies are currently rather reluctant to make new investments and start up companies, they are nevertheless preparing for an expansion of trade relations with Ethiopia.”

More: German companies want to invest more in Africa in 2023