China–Africa cooperation: Struggling commodities and the silver-lining in the innovation economy

Introduction

The paper interrogates the dynamics of China–Africa relations, against the background of global economic shocks and transformations and their impact on perceptions that have trailed the entry of China into Africa in general. It argues that China–Africa relations have a bright future, one however that is increasingly threatened by the failure to deepen the relations through cooperation in technology, capacity building and the protection of each other’s interest in the global arena. The importance of the subject matter is underscored by the fact that the African continent that sufficiently weathered the impact of the global economic crisis out of increased close economic engagements with China, appears to be in trouble for the same reason. After an initial surge in Chinese investment, African economies face a serious threat in falling commodity prices largely down to China’s domestic-oriented response to its slowing economy. The resulting slump in major African economies saw the International Monetary Fund (IMF) project an expansion of only 3.75% for Africa in 2015, down from 5.0% the preceding year (Pani, 2015). Due to this decreased momentum, and economists’ fears about China nearing its consumption limits of commodities, including its gradual shift to a services-driven economy, Sino-pessimism in Africa has rebounded, as a result. Predominant among the various criticisms of China’s growing interest in, and increasing activities on the continent, is the contention that the relationship is a product of ‘neo-multi-influencialism’: a post-Cold War situation where major powers seek to maintain their influence and safeguard their strategic interests in Africa without due recourse to Africans. Simply put, they liken ‘China in Africa’ to a form of indentured capitalism defined by the former’s interest in Africa’s primary resources, in an evolving international system characterised by increased uncertainties over the continent. Perhaps, the decline in trading seemingly corroborates the charge by Sino-pessimists that China is perpetuating the same distortions which had been introduced to Africa by colonialism and global capitalism. However, such defeatism, on the one hand, plays downs (the reality of) the interdependent nature of economic relations where China subsists as a key source of finance and, on the other hand, has the tendency of neglecting the opportunity to diversify economic engagements; to obscure a likely ‘fourth industrial revolution’ (Schwab, 2015) ¹ , and dissuade both sides from taking advantage of the relationship’s untapped yet unprecedented potential.

Against the backdrop of perceptions that have trailed the entry of China into Africa in general, including the recent misgivings, a critical question is raised – Can falling commodity prices damage the relationship between China and Africa? Put differently, what options arise for their cooperation to survive the aftermath of the drop in commodities? On this account, the article seeks to examine the evolving situation through the lens of international economic interdependence. In response to its growth challenges, China is shifting its economy towards the consumer and services sector, but not so different transformations are noticeable in Africa in terms of revolutions in its growing information and communication technology and financial technology sector. Indeed, many of the continent’s tech start-ups are providing advanced innovations and solutions to problems that are attracting international and local investors keen on the business opportunity. According to Per Rocket Internet’s 2014 public listing, e-commerce pioneers Konga and Jumia, claim revenues rose 450% in 2014, and $28 million in net revenues, respectively (Rocket Internet, 2014). Going by IMF projections that sub-Saharan African economies may return to a 5% annual growth in a couple of years (Pani, 2015), to consider the growing space for productive entrepreneurship investment in Africa’s digital innovation economy might be prescient. In any case, Sino-optimists insist that China is a force for good in Africa, which seeks not only mutual benefits to all, but also is willing to explore untapped opportunities for increased beneficial economic cooperation. Irrespective of real or imaginary views on the inflexibility of the logic of foreign investment capital, the tremendous promise of such engagement makes rebalancing China’s ‘New Strategic Partnership’ with Africa an imperative. The unprecedented prospects demand that opportunities to diversify for sustainable investment and increased returns are harnessed, and economic ties evolve. The paper is divided into six parts. Following this introduction, the second part lays the theoretical basis for the study, while the third historicises the contemporary character and structure of China–Africa relations. The fourth section discusses the slump in commodity prices vis-à-vis co-dependency in China–Africa economic engagements. The fifth section considers the option of science and technology in rebalancing investment cooperation between both sides, particularly diversification into Africa’s digital innovation economy, while the sixth part concludes.

Economic interdependence as a reality of state participation in the international regime

For the state, the notion that territoriality and national interest of state as defined in terms of power (Morgenthau, 1958) will always dominate the hierarchy of issues, has lost its essence since the end of the Cold War. In this regard, the ambiguousness of a strict dichotomy between domestic and foreign policy has seen scholars make use of the term ‘intermestic policies’ to refer to the thin line between domestic and foreign politics (Gray, 2007; Mansbach and Taylor, 2004; Rourke, 2001). States, therefore, are now set in a transnational society (understood as the modern-day pervasive state of globalisation) characterised by economic, social and cultural interaction across borders. Within this order, the development of national economies of state outside the wider gamut of the external world has become an arduous task because the sustenance of economic prosperity is increasingly subject to the causal relationships among states and other economic actors. Realising this as far back as 1970, the United States extended its understanding of national security to include international economics, having come to terms with the fact that the self-reliance and self-sufficiency of US economic muscle had become hugely conditioned to the economic policies of several other countries (Mathews, 1989). In view of this, the pursuit of economic growth and development by the state transpires in relation to the international community where disparities in power – understood by this paper as disproportions in economic resources ² – are huge determinants on state behaviour (Ubi and Akinkuotu, 2014: 416); as ebbs and flows thereof come to bear on its stake or share in, and influence or sway over, the international economy. Thus, knowledge that linkages between wealth and power are reinforced by economic growth, itself a strong agent of change in the character of international relations (Gilpin, 1981: 124), must come to terms with commercial interdependence and the long-term implications for the factors in question (Katzenstein et al., 1998: 684).

In view of the above, it is worth noting that as consumers and producers, nations and states, in acknowledgement of the mutual benefits of trade and economic cooperation, seek external economic engagements of reciprocal activity. From a commercial liberalist perspective, interdependence is premised on its ‘nature’, ‘complex’ and how the ‘international regime’ interacts thereupon. Regarding this, for any one interlocking relationship arising from the division of labour between highly specialised states (Deutsch, 1954), wherein economic behaviour in one country shoulders some exposure to developments or policies originating from outside its own borders (Marina, 1979), interdependence itself, by nature a necessary mutual dependence, imposes costs on a state’s sovereignty. It is this cost–benefit perspective that the notion of complex interdependence refers to in situations typified by reciprocal effects amid states or actors in different nations (Keohane and Nye, 2001); the costly effect of interstate interaction otherwise referred to as opportunity cost. Multiple channels of contact connect societies, military-security issues are devalued on states’ agenda, and “military force is not used by governments towards other governments […] when complex interdependence prevails” (Keohane and Nye, 1977). Of importance to this paper, and in light of Keohane and Nye’s views, is its presupposition about sensitivity which refers to the extent of the effect of economic activities in one country on another, and vulnerability, the availability and costliness of the options they face. Worth mentioning here is the international regime, in essence, a body of rules, procedures and norms that regulate state behaviour in a global polity devoid of coherent rules and an overarching authority (Mansbach and Taylor, 2004; Rourke, 2001), by means of integrating existing forms or structures with the bargaining behaviour or process within power structures. Important, therefore, in an interdependent world, is the international regime due to how it influences state behaviour, government actions and ultimately patterns of interdependence, by control of transnational and interstate relations which includes foreign trade and investment.

There is no gainsaying that economic welfare, used interchangeably with economic well-being which refers to the maintenance of the mode of production in a society and, by extension, the state’s resource base (Wendt, 1999: 235), is a key preoccupation of the state. Here, the deficiency of self-sufficiency was pointed out by Thomas Hobbes when he opined that scarcity “prevents nations from having as much as they desire – which makes men enemies and enmity in itself is exacerbated by competition, diffidence and glory. The first make men invade for gain; the second, for safety; and the third, for reputation” (cited in Donnelly, 2005: 33). Today, national goals have grown to encompass economic growth and development because the survival of the state has also come to rest on governments’ responsiveness to domestic political demands for economic welfare. Regarding this, any government that badly manages its domestic economy, in actual fact, opens the door to the troubles of recession, mass job loss, etc., which can unsettle the state in ways that either erode it or put it at risk of disorder, or in some cases may even see leaders out of office (Kaarbo and Ray, 2011: 355). In short, economic primacy matters today as much as military primacy mattered during the Cold War (Art and Jervis, 1996: 265–266). Hence, the advancement of national wealth or economic security inform the inroads made by established economies of the West and, more recently, the emerging economies (Brazil, China, India, etc.) in other geopolitical regions such as Africa, for inextricable access to economic resources, for example, vast natural resources, the huge market/population base, etc. Nwoke (2009: 1) captured this vividly when he opined that nations must relate to one another in the international system to maximise the values inherent in the global economy, and economic benefit is central in those expected values. In that stead, therefore, states have little incentive to wholly rely on models of self-sufficient growth, but rather aim to reap the economic benefits associated with participation within the international division of labour, as well as maximise gains of free trade among national economies. Regardless, participation in the global economic regime brings about the loss of autonomy and other attendant costs, to the extent that governments should continually be concerned about the kind of economic impact that their extra-territorial economic engagements will have domestically (Ubi and Akinkuotu, 2014: 416). Indeed, policy commitments to international economic cooperation derive from the very logic of the pervasive interdependent relationships existing in the modern global community (Kaarbo and Ray, 2011: 355–356). Therefore, in the order of economic interdependence, it is the duty and responsibility of every nation to have an economic policy of national self-adjustment and adaptation to (the benefits and costs of) the external world (Ubi and Akinkuotu, 2014: 417), for the reason that these economic relations are the means through which they allocate their economic resources for export purposes, seek to augment their resource deficiencies, delineate and articulate their perception of a fair and equitable global economic order and participate generally in the ever-expanding networks of intercontinental economic transaction (Akindele, 1990: 106).

In recapitulation, therefore, in state relations within the present interdependent global system, it is understood that the economic interests of a nation can hardly be pursued in isolation from other states and economic actors. As globalisation has become established, economic interests are complementary to one another, even as the economic influence of a nation can encroach on that of another. This is particularly valid for Sino–African cooperation given the substance its respective parties attach to their economic development. What matters, therefore, is how to strive for the right balance in channelling free trade and direct investments in the service of economic interests, because state cooperation serves as an instrument to advance economic interests and attain social necessities. In light of the discourse above, it appears that the often-made similarity between ‘China in Africa’ and colonialism and global capitalism remains a subject for debate, for how can states attain a truly symmetrical division of labour in terms of promotion of exports, attraction of investments, diversification of trading patterns, etc., without first reaching such evenness in national capabilities? On the face of it, perhaps the global economic crisis, as a test of the strength of the China–Africa relationship, marks China, as opposed to Africa’s traditional partners, as an important economic partner for the continent, since various governments regard the country as a solid, dependable partner through the flux of economic cycles.

China–Africa relations revisited: Characterisation and structurisation

Historically, the Forum on China–Africa Co-operation (FOCAC) summit serves as the instrument for strengthening and cementing China–Africa relations. Outside aiming to harness each other’s attributes for mutual benefit (FOCAC, 2006), the FOCAC was introduced in 2000 to conclude bilateral agreements, manage the ‘China in Africa’ discourse, and reinforce China–Africa cooperation on the premise of a new strategic partnership (Centre for Chinese Studies, 2012; FOCAC, n.d.). In fact, the parameters for the new level of relations are traceable to the Beijing Summit in 2006 that not only highlighted the increasing importance of the relationship but also redefined its course wherein it was categorically stated that:

…the establishment of a new type of strategic partnership is both the shared desire and independent choice of China and Africa, serves our common interests, and will help enhance solidarity, mutual support and assistance and unity of the developing countries and contribute to durable peace and harmonious development in the world. (FOCAC, 2006) ³

Of the various summits that have been witnessed to date, it was the July 2012 meeting with the theme, ‘Build on past achievements and open up new prospects for the new type of China–Africa strategic partnership’, that assessed the implementation of procedures subsequent to FOCAC’s Fourth Ministerial Conference, and found the execution of the ‘Sharma El Sheikh Declaration three year Action Plan of 2009–2012’ satisfactory. On the basis of such showing, China pledged increased, innovative and effective assistance for Africa’s development. In fact, the Plan in question, considered as the foundation of sustainable development in Africa, covers critical issues such as climate change, market access, finance, science and technology, agriculture, human resource development and education, health and culture (African Union Executive Council, 2010). This leads to the simple conclusion that the FOCAC platform, especially the execution of the Plan referenced above pushed relations to a new level, as typified by a shift from mainly commercial spheres to socio-economic and cultural engagements in Africa. True enough, change is a constant and China’s policy for Africa is no exception; the March 2013 declaration by President Xi Jinping that “To maintain the vitality of China-Africa relations, we must advance with the times” ⁴ helps to shed light on this argument. Moreover, in a display of Beijing’s commitment to innovatively strengthen ties with Africa (Aidoo, 2012), China’s Premier, Li Keqiang paid official visits to Ethiopia, Nigeria, Angola and Kenya, earlier in 2014 (Tiezzi, 2014). Hence, it can be rightly argued that the new China–Africa relations refer to the re-oriented and redefined economic, social and political cooperation between Beijing and the African continent.

Exit rise, enter slump: Perceptions, misgivings, predispositions and propositions

It must be noted that China’s rise as an industrial power and the surge in its investment and interest in Africa, was embraced by countries such as Angola, Nigeria, Zambia, among several others that came to increasingly rely upon it as an external engine for driving domestic growth. In this regard, China’s unrelenting purchase of, at that time, highly priced oil, copper and other primary commodities that Africa readily offers brought the continent unprecedented levels of growth. Between 2000 and 2011 alone, the value of Africa’s commodity exports leaped from $100 billion to $420 billion, compared to a minor $13 billion to $33 billion increase in that of manufactured goods, according to World Bank data (Stoddard, 2016). Accounting for two-thirds of African growth within this period (Stoddard, 2016), many countries welcomed the commodity supercycle-fed boom as a function of sustainable economic transformation. Subsequently however, in 2015, a 40% drop in Chinese direct investment to Africa was recorded (British Broadcasting Corporation, 2016) as the country began transiting towards an internal-driven economy from an erstwhile export-centric model. Because of its excess production capacity, China opted to rebalance its economy towards the services and consumer sector, even as it soft-pedals on its manufacturing, construction and import industries that readily consume raw materials. Having to deal with a manufacturing glut, China is reining in its appetite for primary commodities that fuelled the high levels of growth among African economies. With limited revenue options, the impact is greater among the continent’s major oil producers where growth dipped in 2015 – to 4% from 6.3% in Nigeria, and 3.5% from 4.8% in Angola – compared with the previous year, according to IMF data (Chima, 2016: 8). In all, much of falling commodity prices, as well as declining tax revenues, falling currencies and rising inflation in major African economies, are down to China’s economic transformation.

Today’s decreased momentum in major African markets is cast as an economic contagion that spread from China, by critics who have always insisted on the need for caution when engaging with the country. Beforehand, some went as far as to accuse the Chinese government of fostering dependency in Africa, similar to the continent’s relationship with the West. Ordinarily, the role of Chinese investment in African economies raises concerns because of their presence in areas that should ordinarily be left for local industries and as a means to reduce poverty and unemployment at the grass-root level (Agwu, 2013: 466–469). Essentially, local businesses are not protected from large scale industrialists with the market power to determine the condition of the market. The implication is that because of weak laws, large Chinese firms are able set up large firms in Africa, bring in expertise and man power from China, flood the market with cheaper and at times inferior goods, and restrict certain economic activities for local participation instead of employing Africans or opening up the market for large scale competition. In contrast however are China’s contributions to infrastructure, the least of which are: a hospital in Luanda, Angola; a road from Lusaka, Zambia’s capital, to Chirundu in the southeast; stadiums in Sierra Leone and Benin; a sugar mill and a sugarcane farm in Mali; and a water supply project in Mauritania, and is yet to include 100 schools, 30 hospitals, 30 anti-malaria centres and 20 agricultural technology demonstration projects (Ighobor, 2013: 6). Invoking warnings from the boom era, some have argued that such aid has in fact made African economies more dependent on China’s products and unconditional services ⁶ , and showcase Africa’s naivety that anything non-Western does not carry the same dependency implication. Regarding this, in March 2013, then Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi, raised issues with the structural distortions in the relationship between the two countries in an article in the Financial Times of London.

China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism. The British went to Africa and India to secure raw materials and markets. Africa is now willingly opening itself up to a new form of imperialism…….The days of the Non-Aligned Movement that united us after colonialism are gone. China is no longer a fellow under-developed economy – it is the world’s second-biggest, capable of the same forms of exploitation as the West. It is a significant contributor to Africa’s de-industrialisation and underdevelopment. (Akanbi and Oyedele, 2013)

Barely a month after Sanusi criticised the China–Africa relationship as carrying with it a “whiff of colonialism”, did the Chinese government allegedly embark on a comprehensive review of its business role in the country. Related comments by other public figures led the Director of the Political Section at the Embassy of the People’s Republic of China in Abuja to fault accusations of China’s imperialist intentions. He made note of several occasions where African leaders expressed disagreement on so-called China’s neo-colonialism in Africa. During a meeting with the Congolese President, President Xi Jinping made reference to the issues raised by the Central Bank of Nigeria governor, stressing that developing friendly cooperation with African nations has always been an important cornerstone in China’s foreign policy and a long-term and steadfast strategic choice for China. “China will always be a reliable friend and a sincere partner of African nations, and stands ready to continue to reinforce and deepen the new type of strategic partnership between China and Africa within the framework of the Forum on China-Africa Cooperation” (Akanbi and Oyedele, 2013), said the Chinese leader. As for Africa, Sanusi’s article signified an important juncture in the continent’s relationship with China in the sense that since its publication there was a great move by African governments to review their economic relations with China. Countries such as Namibia and Ethiopia began adopting stronger approaches to negotiating with Chinese companies. In mid-2013, the transitional government in Mali cancelled a series of deals that it deemed wasteful. The Zambian government has been the most aggressive about keeping Chinese companies in check, revoking the licence of Collum Coal Mine from its Chinese owners in February 2013, and repossessing three mines from it over safety and labour concerns. Whether Sanusi’s views are real or imaginary, what is now unambiguously clear about ‘China in Africa’ is that the hierarchical division of labour in terms of manufactured goods compared to commodity exports has been a concern of both Chinese and African policy-makers.

In spite of genuine goodwill from both sides, African economies that experienced years of unprecedented growth are now tottering in the wake of falling commodity prices. Some critics see the development as the first of symptoms, if not long-term consequences, of China’s focus on African commodities, extracted through cheap African labour, with little return for the continent other than manufactured goods – refined or end products of resources from its own mines and ports. However true, what is overlooked is that a systemic contradiction of any one relationship between a major power and a lesser power is that it is typically unbalanced in favour of the stronger power. And because the measure of reciprocity between unequal powers is subject to the imbalance in their national power, some disproportion in their bilateralism or multilateralism must readily be noticeable, as a result. The implication is that African economies should expect some distortion in their engagements with China, and the ‘strict equivalence of benefits’ (Koehane, 1986: 6) lacking in trade and investment is a demonstration. Compounded by the ongoing slump in global commodity prices, the extant imbalance reflects in a large trade surplus between both sides: a 42% drop in African exports to China from $116bn in 2014 to $67bn in 2015, whereas Chinese flows to Africa steadied between $106bn and $102bn (marginal 3.8% decline), the same period (Freemantle, 2016). Viewed through the sensitivity–vulnerability prism, there is some legitimacy in concerns that African economies have become uniquely overexposed to China’s economic slowdown. This is because as African economies flourished during the commodity boom, their markets became more and more integrated into China’s supply chain, as a result. The point being made is that not only do both sides appear to have underestimated the logic of capital, but in similar vein also overestimated the degree of freedom their economies have from each other, in particular African economies from China’s.

Exporting fewer commodities on the one hand, African economies such as Angola, Nigeria, Ghana, among many others are experiencing a downturn largely brought about by China’s economic transformations. On the other hand, it is trite knowledge that commodities boom and bust and as such the case cannot be different for Africa’s commodity offering. Therefore, that bilateral trade between China and Africa has been declining rapidly since late 2014 (Domínguez, 2015), and many commodities that China purchases from Africa have dropped prices by 40 to 60% (Pani, 2015) in the last two years, is revealing of the true problématique – (co)dependency between hugely disparate and uneven economies. That said the IMF believes that the countries most affected by the aforementioned shocks would need only three years to return to an annual growth rate of 5%, provided that they can effect the necessary or required policy changes for this to occur (Pani, 2015). Then again, China’s progress towards domestic consumption has the potential to peel back the curtain on new forms of business opportunities, which could fuel new investments. This is particularly true if the Chinese embrace greener technologies that require African rare earths and platinum, top talents, among others. In that light, many of Africa’s resource-rich or export-reliant economies can capitalise on their growing information and communication, and financial technology sectors in transcending trading primary commodities, even as they commence with broad scale diversification in anticipation of China’s economic rebound.

Rebalancing for the future of Sino–African cooperation: Can science and technology be prioritised as an area of mutual interest?

More recently, critics charge that collapsing commodity prices and the lack of industrialisation in Africa, would visit more ominous long-term consequences of China’s loans and land investments on the continent. However true, the contention that the commodity downturn has forever confined the pursuit of African competitiveness and prosperity to the annals of history remains open to debate. To elucidate, it must first be mentioned here that, contemporarily, advances in science and technology are important for economic growth and development. Regarding this, however, African efforts to devise sectoral policies are a priori complicated by the impact of the highly advanced West (South Commission, 1990: 109). This much was reiterated in Kigali during a high-level round-table on higher education for science and innovation, where members insisted on setting a bold target of doubling-up the number of Africans within the field before 2025, in a bid to see the continent become knowledge-driven in not more than two decades (Diop, 2014: 13). As a result, it is more difficult for Africa to sustain its economic growth and development and, in particular, the practical gains from external economic cooperation. However, the drag on global recovery and some other unexpected shocks has seen international investment venture further afield from traditional industries of commodities, manufacturing and agriculture to unexplored opportunities. Regarding this, Africa’s increasingly educated, highly populated, and hence lucrative frontier markets have sparked much attention. The doubts expressed by Sino-pessimists overlook that Africa has more to offer beyond oil, copper, minerals, among many other commodities. Thanks to financial returns that are double the value obtainable from commodities, many African economies are now attracting some of the world’s leading investors looking for a stake in their growing information and communication technology, and financial technology industry. Of utmost importance, therefore, in enhancing capacity building and technological know-how towards improving the continent’s competitiveness in international markets, is that African countries must be able to pick the technologies most appropriate to their circumstances and, in many cases, adapt them accordingly (South Commission, 1990: 109). Taken together, perhaps, the future of ‘Africa rising’ never rested in commodities but the opportunities afforded by science, technology and innovation.

Evidence of African digital innovation thriving in the face of struggling commodities, saw a $60 million fund very recently announced at the 2016 (1st) Africa Business Angel Forum held at the Lansdowne Club, London (Bremmen, 2016). While $50 million is to come from the United States-based United+, the remainder $10 million fund comes courtesy of AXA Ventures, a component of French insurance giant, AXA. In 2015, the continent’s tech startup sector attracted $185 million in funding, according to the African Tech Startups Funding Report 2015 (Mulligan, 2016). This last decade particularly, investments in the African Telecom, Media and Technology sector made 19% annual returns beyond the Morgan Stanley Capital International Index of 11% and petroleum sector of 6% (Freshfields Bruckhaus Deringer, 2014), to signal tech-based start-ups as one of the most enticing prospects for foreign investors. Moreover, estimates by McKinsey’s Global Institute, thanks to a decade of rapid economic growth in Africa, suggest that consumer spending on the continent would exceed $1 trillion annually by 2020 (Leke et al., 2014). Satisfying the needs of Africa’s newly-empowered customers, whose wants are outpacing the continent’s traditional marketplaces, will yield roughly $75 billion in ecommerce revenue by 2025, according to McKinsey. In the 80% of Africans excluded from the financial system – a gap that mobile technology hopes to fill – lies huge potential for productive investment. Already, funding rounds and acquisitions have been concluded on some start-ups, while large venture capitalists anticipating public and private sector incursions are fixing to invest accordingly. Making available more than €300 million ($245 million) in financing, Goldman Sachs and other investors such as AXA, MTN and Rocket Internet have acquired an estimated 24% stake in Africa’s largest e-commerce platform, Jumia, in recognition of its success (Agbugah, 2016). Given that the Chinese economy would keep expanding through acquisitions (The Economist, 2015), its re-orient towards domestic consumption does not preclude the promise of similar (re)engagements with major African economies.

Essentially, the global impact of broadband –which is more in developing than developed economies (Qiang et al., 2009) – and mobile is greatest in Africa, with the latter accounting for more than 6% of the continent’s gross domestic product. In that stead, Africa’s 70% youth population, consisting of a growing middle class with improved spending power, propped by ever-increasing internet penetration and rapidly expanding mobile technology, provides more than enough room for productive investment. Maximising internet penetration, this population is establishing startups providing innovative programming, inventive software and other product solutions; (more significant for Africa) evolving into small–medium scale enterprises and tech-based companies – the true engines of growth – creating employment, reducing poverty and paying taxes (Jackson, 2015). According to Harvard Business, the international digital economy is moving fastest in Kenya, Nigeria and South Africa (Chakravorti et al., 2015, wherein Kenyan innovation in mobile money has grown to be a global phenomenon (Stahl, 2015). Led by these countries, including Ivory Coast and Ghana, Africa’s digital economy is experiencing an intense cycle of increasing incomes and demand for products and services. Facilitated by pro-innovation legal regimes and increased broadband access, mobile penetration rates climbed to 90% and saw the establishment of innovation bases such as Kenya’s iHub, Ivory Coast’s Orange Fab, Nigeria’s Leadpath, Ghana’s Meltwater Entrepreneurial School of Technology and South Africa’s 88MPH, among many others (Nwobi and Buch, 2015). Africa’s entrepreneurial and youthful population are championing the development of mobile web applications that are disrupting traditional markets, and addressing key challenges across socio-economic divides. Attesting to the evidence of startups on the continent defying the global technological slowdown (Kuo, 2016), the discourse at the 2016 World Economic Forum included Africa as the driver of the international innovation revolution (Moosajee, 2016). In effect, this escalating phenomenon is playing a vital role in China’s multipolar vision for global technological governance, wherein no one country can lay claim to inventive ‘exceptionalism’.

Conclusion

From the foregoing analysis, China–Africa relations have witnessed a gradual expansion of China’s commercial interests in Africa to encompass the socio-economic development of the continent. Indeed, on the one hand, there is immense optimism about the untapped benefits of the new strategic partnership but, on the other hand, scepticism continues to rise among countries of engagement, international economists and the global community. Sino-scepticism has seen renewed prominence because China’s progress from a huge commodity consuming economy exposes Africa’s reliance on the country as an external instrument for driving many of the continent’s economies. The relations between country and continent primarily reflect an extensive economic interdependence which, in particular, represents complex interdependence as mirrored in the prominence of economic and developmental imperatives derived from commodities trading, the various intergovernmental and extra-intergovernmental lines of contact that cut across business, societal and cultural domains, but record the most dealings in the commercial sector, and the less substantial military–security dimension and minor role of military force as an instrument of policy. Although, considering the needs of China’s industrialisation, largely defined by the distortion inherent in cooperation among unequal economies, critics contest the relevance of the transnational relationship on the grounds that Africa is permitting predatory capitalism anew on the continent through its relations with China. In fact, views that China–Africa economic cooperation translates to indentured capitalism in Africa have grown with uncertainties over the decline in China’s demand for African commodities. However true, policymaking elites must not overlook the fact that in interstate relations every benefit usually comes with a cost attached to it. For the Chinese economy built on manufactured exports, the cost of decreasing global demand – where weakening currencies in Africa’s huge market base play a part – has inextricably fed into its overcapacity problem. Little wonder that the present crop of China’s leadership are more beset with the obligation to reinforce and consolidate – rather than the need to build – the country’s economy, demanding that African governments develop policy frameworks for engaging China, insofar as China exists as one of the continent’s major investors. In that stead, policymakers and economic planners in Africa must place a great deal on an appropriate response to the paradigm shifts within the Chinese economy. Instead of the ills/wells of China–Africa cooperation, concerns should be about carefully planning the direction and determining the channel (the ‘where’ and ‘how’) of Chinese investment towards African economies. In China’s current economic evolution, Africa, as a hugely attractive marketplace, has ample raison d’être for developing a China policy ⁸ for long-term economic engagement – and the continent’s digital innovation economy provides a viable starting point. Regarding this, African governments can adopt policies that better regulate Chinese investors’ behaviour and serve to streamline their investments toward the migration of their economies from reliance on commodity business, more constructively.

Having said that, innovation knows no boundaries and innovators, industrialists and policymakers on both sides must acknowledge this fact if they must sustain economic growth and prosperity. However, this area has received little emphasis in advancing China–Africa cooperation. This is a missing link that ought to be investigated. For China as an emerging leader in innovation, the possibility of cross-cultural cooperation in business and technology with Africa will only be ignored to the detriment of its growth, as its history with Western techno-protectionism proves. The rise of e-commerce pioneers; increased incursion of venture capital funding and acquisitions, and initial public offerings in the continent’s digital innovation economy, is a precursor for an imminent boom. Africa should seize this opportunity to clear policy bottlenecks that have prevented the commercialisation of its inventions. The continent’s policymakers need to build and implement comprehensive policies and strategies that place innovation as an integral part of foreign investment relations. Notwithstanding the disposition of venture capital financing and angel investors, the emergence of alternative financing ⁹ translates not only to more capital for African ‘technopreneurs’, but also means that the continent’s technological transformation (and derivable revenues) may outrun the pace of global direct investment.