It is a known fact that China and Zambia have shared a long history that has been beneficial to both countries. Granted many may argue of the exact extent of the impact either country has had though it is no secret the Chinese infrastructure investment in Zambia and the wider African continent has been substantial.
According to an article attributed to the London School of Economics (LSE), China’s FDI stock in Africa totalled $110 billion in 2019, contributing to over 20% of Africa’s economic growth. Chinese FDIs have scaled up African supply to satisfy the rising middle-class demand.
But while China has been addressing its own needs to ensuring it moves multitudes of its own population in middle class, Africa has been the beneficiary of what Dambisa Moyo described in an interview she gave to CNN as “Yes (affirmative response to the Chinese mix FDI into Africa), absolutely, but in a strange way it’s exactly what we need in terms of delivering economic growth and meaningfully reducing poverty. We need jobs, we need investment, we need trade, we need foreign direct investment, whether investment domestically but also from the outside.”
Prior to the just ended peaceful elections and seamless transition of power in Zambia, China’s infrastructural impact on Zambia was felt as the country commission the 750MW Kafue Gorge Lower Project. This is one of many projects that has been delivered by the China in Zambia.
Earlier projects in Africa saw large funding coming from Chinese State-Owned Enterprises. However, over the last two decades the profile of capital is changing. Private Chinese capital has also seen benefits in investing in the region. According to the LSE article, “Chinese private companies account for 90% of the total number of Chinese companies investing in Africa, and 70% of the value of Chinese FDI, according to the Chinese Ministry of Commerce. By the end of 2010, the number of Chinese companies operated in the continent was 1,955, with more than 100 state-owned actors”.
Chinese private capital will therefore be looking closely at the policies that are implemented in the “New Dawn” in Zambia as they are motivated by potential of African countries whose future appears progressive.
With China experiencing a rapidly aging population and rising cost of labour, Zambia, which seeks to become a hub on investment, may hold the key to unlocking industries that would traditionally be domicile in China leading to mass job creation. However, skeptics may argue that Neo-colonialism would be a concern. However, this argument has been countered by Global Economist Dambisa Moyo as a governance issue.
“Ultimately, the responsibility of how China engages in Africa is really at the domain of the African governments”.