December 16, 2024

Biden's belated attempt to divert Africa's critical minerals

By: Azhar Azam

In a last-ditch effort to woo Africa and meet his yearslong promise of visiting sub Saharan Africa, lame-duck US President Joe Biden visited Angola, marking the first trip by a sitting US president to the region in almost a decade.

Lobito Corridor – first strategic project launched under the flagship Partnership for Global Infrastructure and Investment that connects Democratic Republic of Congo (DRC), Zambia and Angola to regional and global markets though Angolan port of Lobito – was Biden’s key focus over its proximity to the Atlantic, closer to the US and Europe.

America wants to use Lobito Atlantic Railway to secure critical minerals, required for global low-carbon transition such as electric vehicles, solar panels and semiconductors, with the Corridor being the quickest route for exporting these raw materials from the central African copper belt to the US. Washington has also declared to expand the railway project to the Indian Ocean through Tanzania.

Many critical minerals, vital for US economic and national security, are mined in Africa where China has a stranglehold on these raw materials. For instance, DRC is home to the world's largest deposits of copper and cobalt and China owns 80% of its copper mines and 76% of the cobalt. Out of the seven lithium assets in Africa expected to start production by 2027, Chinese companies also have at least 50% equity ownership.

Through initiative, Washington seeks to alter this longstanding status-quo by transporting Africa’s critical minerals to the US in a bid to lessen its reliance on China and its clean energy competitiveness. This is crucial for the US and NATO, facing serious risks of mineral shortages over the Ukraine war. In an attempt to counter China, the US is also presenting itself an alternative while taking advantage of billions of dollars of investments from China in Africa.

It isn’t however easy for the US to blunt China’s influence in Africa given Beijing over the last two decades has become Africa’s largest trading partner, biggest financer including in infrastructure, mining and energy and a leading source of foreign direct investment. Through initiatives and platforms such as Belt and Road Initiative and FOCAC, Beijing has won over the continent.

China at this year’s FOCAC summit pledged to provide nearly $51 billion in funding to Africa and create one million jobs across the continent. China’s support of African modernization is reflected in the continent’s youth and decision makers who have a high approval rate of the world's second largest economy compared to the US and Europe over their excessive interference in their domestic politics and sovereignty in the name of democracy and human rights.

In a background press call ahead of Biden’s visit, White House official boasted that 80% of US $55 billion investments in Africa in 2022 through 2025 have been met; much of those investments didn’t bring visible benefits to average Africans, raising doubts whether America would be able to replace China in near future.

The US efforts could also suffer a setback as more and more African countries are considering reducing export of raw materials to promote local processing. Sensing African demands, China has already pledged to develop local value chains, manufacturing and deep processing of critical minerals, which will be backed by direct investment in refining and processing. This would allow Africa to tap its potential of generating $16 trillion revenues from extraction of just four key minerals – copper, nickel, cobalt and lithium – over the next 25 years and reduce the $100 billion annual infrastructure financing gap.

As America looks to serve its own interests and blunt China’s influence in Africa, many in the continent accuse the West of holding a predatory attitude toward the continent citing their colonial legacies, admitting Chinese investments have modernized the continent and generated thousands of jobs.

China’s track record of delivering infrastructure projects has raised its credibility and attractiveness across Africa, underscoring why the continent will not allow the US to use the Lobito Corridor as a strategic tool against China. What’s more, the African leaders will be keen to see the approach of Donald Trump who has made “America First” as his top priority with a history of disparaging the African nations.

The Lobito Corridor will be completed by the end of the decade, suggesting the US will have to stay committed to the continent for at least six years, keeping in view its historical ambivalence to Africa, looks highly improbable. America’s interest in a narrow group of African countries, crucial to build its critical minerals supply chain, further reveals that its commitment, if continued, will be largely confined to a handful of African countries, stoking uneasiness in the rest of Africa about US self-centered behavior.

Biden’s belated attempt to deepen partnership with Africa is unlikely to result in a meaningful outcome since it comes at the tail end of his career, contains cosmetic measures to reinstate US image, boosts ties with selective African countries and aims to solely divert the continent’s resources to America. It could have bolstered Africa-US relations had it come earlier, focused on overall Africa’s development and didn’t make his visit look as extractive and exploitative.

*My article that first appeared in the "Express Tribune"

December 10, 2024

How China is outsmarting the US in Latin America

By: Azhar Azam

In a latest sign of booming relations, Chinese President Xi Jinping and Brazilian President Lula da Silva upgraded their bilateral relationship and struck more than three dozen agreements including on agriculture, trade, investment, infrastructure, industry, science and technology and energy.

Bilateral relations have shown significant dynamism with Beijing being Brasilia’s largest trading partner since 2009, one of the main sources of foreign investment and biggest export destination. Brazil maintains a whopping $51 billion trade surplus with China and its exports to Beijing have surpassed the combined sales to the European Union and the US.

China, once a major buyer of the US soybeans, has been diversifying its farm purchases from America and Brazil is emerging as a ley beneficiary of this trade war. In 2023 alone, the South America agriculture powerhouse shipped more than $60 billion of agricultural products to Beijing, up $9.5 billion from 2022. Brasilia continues to eat the US share by flooding the Chinese markets with its corns and soybeans.

Donald Trump’s return is already helping Brazil as new agreements have opened the Chinese market for four new Brazilian agri products: sorghum, fresh grapes, sesame and fishmeal. Given China buys almost all of its sorghum from America, it indicates that Beijing has made the first move on the geopolitical chessboard to put pressure on Trump, anticipating the coming January storm when he assumes office and dials up his trade war.

One of Lula’s successes in his last year’s visit to Beijing was resumption of Brazilian beef exports. This by the end of 2023 allowed Brazil to export more than $8.2 billion of meat to China, forcing Brazil’s major competitors including the US to slow their production. Brazil, unequivocally, is scooping up the opportunity to boost its agricultural exports to China at the expense of the US.

Brazil has been pursuing an independent and non-aligned foreign policy; under Lula, Brasilia has become fiercely emboldened in its international approach. Declaring his country’s relations with China “extraordinary,” hoping them to “go beyond” trade, the Brazilian president in 2023 stated “Nobody can stop Brazil from continuing to develop its relationship with China.” This represented his blatant pursuit of autonomy in international relations and opposition to the Western decoupling (now de-risking) from the world’s largest economy.

Last year, Lula and Xi sought to renew space cooperation and build a seventh satellite in the China-Brazil Earth Resources Satellite (CBERS) program. The CBERS-6 would be launched from China in 2028, improving Amazon monitoring, providing more information on deforestation, agriculture, droughts, land use and water reservoirs.

The recent agreement between China’s SpaceSail and Brazil’s Telebras, aiming to challenge Elon Musk's Starlink by delivering satellite communication services and broadband internet services to Brazil, although will account for just 0.5% of the Brazilian total broadband market; it's blow to the US, seeking to hobble China's tech advancement globally, and the manifestation of Lula’s vision to deepen cooperation with China beyond trade.

Brazil and China are partnering to lead the global south, pushing for a more central role of the developing and under-developed economies in the multilateral institutions and supporting their development through science and technological innovation. While Lula is positioning himself as a new leader of the global south and envoy of peace, climate and global governance reform, Xi is patting Brasilia and Beijing to “assume the great historical responsibility of safeguarding the common interests” of the developing world.”

Both Brazil and China have agreed to find synergies between the Brazilian development plans and Chinese Belt and Road Initiative. This effectively allows Brasilia to benefit from China's mega infrastructure plan without inviting any resentment from the US, which is the top source of foreign direct investment in Brazil and where Brazil last year dispatched $29.9 billion of manufactured goods to advance its trade diversification. In doing so, Brazil has successfully maintained a delicate balance between the two world powers.

One of the major US concerns is that China can leverage its influence in Latin America to undermine its interests and national security. Yet in contrast to the US Indo-Pacific strategy that relies on security alliances to counter China, this approach is driven by economic partnerships that would help Beijing to deter Washington from threatening the Chinese interests in the Indo-Pacific.

And China is being helped by the US indifference vis-à-vis its neighbors. Washington’s emphasis on vested interests and great power rivalries over the years diminished its influence in Latin America, leaving a vacuum for China to come in and fill the void. For instance, Beijing created some 1.8 million jobs in Argentina, Brazil, Chile and Mexico between 1995 and 2016 through trade, investments and infrastructure projects, helping elevate its positive perception in the key regional countries. Opening of a Chinese-funded mega port in Peru is the latest trailer of China's growing influence in the US backyard, pushing American officials on defensive.

After Xi’s trip, Brazil and China have emerged as like-minded countries. Yet unlike the US that deploy this term as a reference to contain China or dub it a challenge, Beijing are Brasilia are using this characteristic to jointly confront the global challenges, build a multipolar world, reform the international governance, promote peace and stability and accelerate the development of the global south. This empathy will trigger discomfort in the US with no clue whatsoever how to respond to the cascading Chinese diplomatic blitz.

*My article (unedited) that first appeared in the "Express Tribune"

China and Peru: Leading APEC's path to inclusive and sustainable growth

By: Azhar Azam

Under the theme – "Empower. Include. Grow." – leaders from Asia-Pacific Economic Cooperation (APEC)'s 21 member economies, which account for about two-thirds of world GDP and half of global trade, will gather in Peru's capital, Lima, to tackle challenges including climate change, sustainable energy solutions, digital economy transition, and trade facilitation.


Chinese President Xi Jinping is in Lima for the 31st APEC Economic Leaders' Meeting and paying a state visit to Peru. Peru is one of the first Latin American countries to establish diplomatic relations with China, and the two countries have been expanding cooperation in areas such as mining, energy, manufacturing and agriculture.

China and Peru released a joint statement on Thursday, saying that the two countries welcomed the signing of a protocol on upgrading the bilateral free trade agreement, and are willing to incorporate projects in emerging areas such as circular economy, sustainable agriculture, industrial and supply chains, digital economy investment and green development into bilateral cooperation. The two sides also renewed their advocacy for strengthening multilateral cooperation and jointly tackling global challenges.

This year's APEC Economic Leaders' Meeting focuses on three priority areas: Trade and investment for inclusive and interconnected growth, innovation and digitalization to promote the transition to a formal global economy, and sustainable growth for resilient development.

As a key proponent of a free, open, fair, non-discriminatory, inclusive and transparent trade and investment environment and as one of the leaders in innovation, digitalization and renewable energy, China can play a role in the APEC to achieve these ambitious goals.

There is a great similarity between Chinese and Peruvian approaches. While Peru seeks to liberalize trade, strengthen connectivity, narrow gaps through digital transformation, innovation and financial inclusion, and work collectively to foster sustainable development – President Xi has consistently urged APEC member economies to advance trade liberalization and facilitation, actively promote innovation, accelerate digital transformation, bridge the digital divide, and stay committed to inclusive and green development as part of his initiative to build an Asia-Pacific community with a shared future.

Chinese-backed Chancay Port has been inaugurated virtually by Xi and Peruvian President Dina Boluarte. It is set to become a major shipping hub for South America-Asia trade.

Reckoned as one of the Belt and Road largest successes in the region, the mega port will boost Peru's economy and enhance its competitiveness by allowing producers to export across the Pacific Ocean, increasing tax revenues, creating more jobs, reducing costs and time by up to 30 percent, and shoring up inter-regional integration. Peruvian exporters and analysts see it as a "window into Asia" and a trans-Pacific logistic node.

Trade and investment lie at the heart of the APEC agenda. For a long time, Beijing has played a key role in advancing the economic forum's trade and investment objectives.


China's role in the success and economic transformation of the APEC remains vital, given its trade volume in 2023 with fellow members had reached $3.5 trillion (almost three-fifths of the country's total trade). Nine of Beijing's top 10 trading partners were from the APEC, with China being the largest trading partner of 13 member economies.

Beijing and the bloc are also each other's major sources of foreign investment, suggesting both are entwined in a close trade and investment relationship. This economic interdependence among APEC members could translate into prosperity for the people of the region through greater integration and innovative, sustainable, and inclusive growth.

The APEC economies, especially those from Southeast Asia, could not only learn from China's remarkable poverty reduction story but also draw lessons from its unprecedented digital economic transformation. For instance, China's growth in the number of internet users, soaring per the World Bank from 8.8 million to about one billion, with per capita income rising from $873 to over $12,000, and its e-commerce growth from less than 1 percent to 52 percent between 1999 and 2022. The fast pace of digital development offers insights for the partners to accelerate their digitalization.

Several Southeast Asian states are also part of APEC. As green and digital economies feature prominently in version 3.0 of the China-ASEAN free trade agreement, cooperation between the two sides will help build an inclusive and interoperable digital ecosystem, as well as promote sustainable development in the region, in addition to achieving a higher level of openness and further reducing tariff and non-tariff trade barriers.

China is facing certain economic headwinds; however, it has still posted a robust growth rate of 5 percent in the first half of 2024, thanks to increased consumer spending, exports and investment in manufacturing and public infrastructure. This shows that the country is capable of overwhelming challenges and strengthening its position as a leading contributor to world economic growth.

Xi's attendance at the Lima meeting vindicates that China is economically resilient and ready to support the forum's goals, cementing its role in the organization as an important contributor to trade and investment, inclusive and shared growth, as well as innovation-driven green development.
*My article that first appeared at "CGTN"