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China’s interests in Africa are being shaped by the race for renewable energy

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China-Africa relations have strengthened, focusing on renewable energy and mineral resources. China heavily invests in African minerals, raising concerns about local development, labor standards, and sustainable energy access amid the global green energy race.

China-Africa relations have deepened over the past two decades, characterised by increased economic cooperation, investment and infrastructure development. China is now Africa’s largest trading partner, with partnerships focused on building roads, railways and energy projects.

As the ninth Forum on China–Africa Cooperation (FOCAC) kicks off this week in Beijing, a new, green theme is shaping their relationship: the global renewable energy race.

We asked Lauren Johnston, a development economist with expertise in China-Africa relations, to provide some insights into this development as it positions both regions as key players in the global shift towards green energy.

How is the race for green energy shaping relations between China and Africa?

The global climate crisis has created a push for renewable energy technology – like solar or wind power – which would lessen reliance on polluting energy sources. China saw some years ago it had a chance to lead in such a new industry.

Africa is home to a lot of the important minerals needed to create renewable technologies – like copper, cobalt and lithium, key ingredients in battery manufacture.

The race for green energy is therefore leading to a rush for these minerals in Africa, led by China, the US and Europe.

Chinese mining presence in Africa, which is much lower than western presence, is concentrated in five countries: Guinea, Zambia, South Africa, Zimbabwe, and the Democratic Republic of Congo (DRC).

Among them, the DRC, Zambia and Zimbabwe are the crucible of the new green energy race in Africa. They are home to Africa’s copper belt and the greatest store of lithium, copper and cobalt.

The DRC is particularly important. It has significant reserves of cobalt and high grade copper, as well as lithium. Cobalt is an unusually hard metal with a high melting point and magnetic properties. It is a key ingredient in lithium batteries.

More than 70% of the world’s cobalt is produced in the DRC and 15%-30% of that is produced by artisanal (informal) and small-scale mining.

China is the leading foreign investor – it owns some 72% of the DRC’s active cobalt and copper mines, including the Tenke Fungurume Mine – the world’s fifth largest copper mine and the world’s second largest cobalt mine.

China’s CMOC Group is the world’s leading cobalt mining company. It could produce up to 70,000 tonnes, thanks to the new Kisanfu mine.

In 2019, the DRC and China were responsible for about 70% of global production of cobalt and 60% of rare earths.

Zimbabwe is another country in which China has been investing within the context of the green energy race. Zimbabwe is home to Africa’s largest lithium reserves, a critical element in electric-vehicle battery production. In 2023 Prospect Lithium Zimbabwe, a subsidiary of Chinese company Zhejiang Huayou Cobalt, opened a US$300 million lithium processing plant. It has capacity to process 4.5 million tonnes a year of hard rock lithium into concentrate for export, against a global backdrop of some 200 million tonnes produced annually.

Zimbabwean president Emmerson Mnangagwa (L) shakes hands with a representative from China’s Sinomine Resource Group at Bikita Lithium Mine (2023).
Tafara Mugwara/Xinhua via Getty Images

There are a couple of other developments on the continent that are worth watching.

China is investing in the first mega-scale battery factory on the continent, in Morocco.

Chinese interests also have permission to develop the world’s largest untapped high-grade iron ore deposit, in Guinea. Iron ore, used in steel production, plays a crucial part in the renewable energy sector in several ways – for instance, steel is used in wind turbines and in mounting structures for solar panels. The agreement to exploit the Simandou iron ore deposit involves various countries. China’s steel-making giant Chinalco is among the players. Production is due to begin in early 2026.

As China ramps up investments in these green minerals, what concerns exist for African countries?

China’s growing control over key renewables minerals brings several challenges to African minerals suppliers.

For African countries it generates concerns for development – many want to add value to their minerals endowment at home rather than export raw materials to China and then import manufactures. China has been criticised for abandoning African interests by adding value in China and not in Africa. Many people and industries on the African continent lack access to reliable and affordable energy – and local industry is keen to capture that market.

For instance, according to the International Energy Agency, China controls over 80% of the global manufacturing steps involved in making solar panels. The concentration of production in China, alongside competition, has pushed down global solar panel prices.

China’s solar industry is keen to close Africa’s energy gap, providing sustainable energy to the millions that don’t have access. For instance, at this year’s Forum on China–Africa Cooperation gathering, China is expected to advance its Africa Solar Belt Programme. This is an agenda supported by the World Resources Institute which not only seeks to use solar energy to close Africa’s energy gap, but also to focus on powering schools and healthcare facilities with solar too.

Some countries, like South Africa, are pushing back by imposing tariffs on solar imports to protect their local industries.

There are also fears that the race to renewables, and the approach of Chinese mining-sector firms in Africa, is setting back workers’ conditions. Expansion of mines in some countries has also led to forced evictions and human rights abuses.

What can African countries do differently to take advantage of China’s mineral rush?

There are several steps they can take.

First, they can pay more attention to basic labour standards and human rights.

Second, African firms should aim to learn from their Chinese partners. They can develop the industrial knowledge and understanding of the skills and capabilities needed on the continent, similar to how China learned from Japanese, Taiwanese, Singaporean and western companies in the past.

Third, learn from how other emerging markets manage their relations with China. For instance, with China’s help, Indonesia has taken control of the global nickel market. Indonesia started by banning nickel exports in 2014, aiming to build up its own industries for processing and manufacturing. This plan was supported by Chinese investments.

Lastly, what I call China’s Hunan Model for Africa has a focus on agriculture, mining, transport and construction industries, and on building talent. This includes technical and vocational training.

The more African nations position themselves to take advantage of training programmes from other countries, the better their young people will be prepared to drive industrial growth and economic development in Africa.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Business

US Enacts New Investment Restrictions on AI and Semiconductor Technologies in China

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Hanshika Ujlayan

The US has implemented regulations restricting investments in key technology sectors in China, citing national security risks, particularly concerning AI and semiconductors, following President Biden’s previous executive order.


US Investment Restrictions on Key Technology Sectors

The United States has implemented new regulations that restrict investments in crucial technology sectors in China, including artificial intelligence and semiconductors, driven by national security concerns. The Treasury Department’s announcement marks a significant change in the US stance on foreign investment in critical technologies.

Effective January 2, US citizens, residents, and companies will be barred from transactions involving advanced technologies. Investors must also alert the Treasury about investments in less advanced technologies that pose potential national security risks, reflecting a broader approach to safeguarding American interests.

These restrictions stem from growing worries about China’s technological capabilities and military applications. The move follows President Biden’s previous executive order to prevent US investments from unintentionally benefiting adversaries. As tensions rise, these regulations are expected to impact the global tech industry significantly.

Source : US implements new investment restrictions on AI and semiconductors in China

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China

Strengthening Economic Relations Between China and Indonesia: Exploring Trade and Investment Prospects

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Indonesia emphasizes green and digital economic development, investing in renewable energy and healthcare. China, its largest trading partner, accounted for 25.24% of Indonesia’s trade in 2022. Although trade declined in 2023, optimism remains for growth in 2024.


The Indonesian government prioritizes the development of emerging sectors such as the green economy and digital economy. Leveraging its natural resources, consumer potential, and labor force, Indonesia has significantly increased its investment and support in renewable energy, electric vehicles, high-value-added downstream mining industries, electronic communications, and healthcare.

Given the complementary strengths of China and Indonesia in resources, production capacity, technological innovation, markets, and industrial chains, there is vast potential for further economic and trade cooperation between the two nations.

As of 2022, China has consistently been Indonesia’s largest trading partner for 10 consecutive years. According to official statistics, China-Indonesia trade accounted for 25.24 percent of Indonesia’s total trade in 2022. China has also been Indonesia’s largest source of imports for 13 consecutive years, with imports from China making up 28.52 percent of Indonesia’s total imports in 2022. Additionally, China has been Indonesia’s largest export destination for seven consecutive years, with exports to China comprising 22.58 percent of Indonesia’s total exports in 2022.

According to Chinese customs statistics, the total trade volume between China and Indonesia reached US$149.09 billion in 2022, a year-on-year increase of 19.8 percent. Of this, China’s exports to Indonesia amounted to US$71.32 billion, up 17.8 percent, while imports from Indonesia totaled US$77.77 billion, up 21.7 percent.

Despite a slight decline in China-Indonesia trade in 2023, with bilateral trade amounting to US$139.42 billion, down 5.9 percent year-on-year, China remains Indonesia’s largest trading partner. This decline is attributed to global commodity price adjustments. The Indonesian Ministry of Trade (Kemendag) is optimistic that exports to China will increase in 2024 due to the government’s efforts to optimize the Two Countries, Twin Parks (TCTP) cooperation project and China’s continued role as a major trade partner, contributing nearly a quarter of Indonesia’s total exports.

Source: General Administration of Customs, China


This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in ChinaHong KongVietnamSingapore, and India . Readers may write to info@dezshira.com for more support.

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China Real Estate: Sunac’s Luxury Apartments in Shanghai Sell Out in Just 3 Hours

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China’s property market is recovering, with all 158 luxury units at Sunac China’s One Sino Park in Shanghai sold in three hours, generating 5.88 billion yuan, amid new government stimulus measures.


Signs of Recovery in China’s Property Market

China’s property market shows signs of recovery as Beijing implements measures to revitalize the sector. Recently, buyers flocked to a luxury residential project in Shanghai, indicating renewed interest in real estate.

Successful Sale of One Sino Park Units

The third batch of Sunac China Holdings’ One Sino Park sold all 158 units within three hours, generating ¥5.88 billion (US$825.8 million). This follows the successful sales of the project’s previous phases, totaling ¥21.5 billion. The luxurious flats in the Huangpu district were priced at ¥172,000 (US$24,150) per square meter, attracting double the number of interested buyers compared to available units.

Investor Perspectives on Real Estate

Shanghai resident Sun, who purchased a sizable apartment, expressed satisfaction in securing an asset that can “maintain its value.” He noted that current market conditions make home buying a more sensible investment compared to other options like the stock market.

Source : China property: Sunac’s Shanghai luxury flats sell out in 3 hours

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