A look into the trade figures reveals that China’s economic involvement in Africa has significantly transformed. In between the years 1996 and 2015, China’s Africa trade share surged from 8% to 9% with a trading volume of 32 billion in the year 2005 that keeps climbing the ladder (Hoslag et al., 2007; Davies 2007: 25; Rapanyane, 2020).
This increase is attributed to the principal rise in trade of natural resources. In the bilateral trade, both Sudan and Angola are comparatively disadvantaged with China as raw materials are mainly exported without any value-added and various cheap Chinese manufactured products are then imported (Marysse & Geenen, 2009).
The same patterns are also depicted in the trade between China and DRC. In less than two past decades, the significance of the bilateral Sino-Congolese trade has dramatically increased. In the year 2021 (first half), it stood at $6.49 billion increasing by 108.9 % year-to-year with China’s direct investment in the DRC amounting up to
$176 million making China the biggest importer of exports from China (Global Times 2021). Up to the early 1990s, the DRC had just a symbolic value for the government in Beijing. The latter tried to preserve the friendly relations with the DRC of Mobutu through the construction of prestigious and large infrastructural projects that no other western donor wanted to finance. Such projects included the “People’s Palace’ and
‘The Kinshasa football Stadium’ (Marysse & Geenen, 2009: 377).
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The seemingly superficial investment of China into the DRC has changed into vigorous and tangible involvement. From the year 1997, various engagements for authentic and future cooperation agreements have culminated with Laurent Kabila and his son Josepha Kabila. Presently, most of the Chinese companies are mostly active within the Katanga Province. The recently signed Sino-Congolese agreements are variated into a more formalised and organised structure, commercially and industrially sound exploitation of the African country’s natural resources. This is mostly explained in the comprehensive modernisation of the mining infrastructure and a reformation of the transport routes utilised for the export of natural resources. Most observably, the combination of copper and cobalt has caught the attention of Chinese MNCs. From the viewpoint of the Non-Ferrous Metallurgie companies, mineral ores are commercially most fascinating due to the more complex refinery process that allows them to realise a substantial value-add (Rapanyane, 2021).
In spite all of the above, Chinese contemptible imports are best suited for the DRC population’s modest incomes. Additionally, there is substantial production of manufactured goods within the African country. Most of the Chinese imports do not make up a competitive threat as they could have done in other African nation-states.
Apart from that, this definite result only survives when the DRC considers price superior or equal to the international market prices for all its exports. In the paradoxical case, when the Chinese purchase at underneath world market price levels; the DRC advantages for the DRC fade away completely. These are the risks mostly found in weak African nation-states that enter contract negotiations with stronger commercial and economic partners in the international system (Rapanyane, 2021).
6.3.1. Characteristics of Chinese-DRC trade and economic agreements
Both China and the DRC have centralised their trade and economic engagements within the context of the 2007 Protocol including the Sicomines deal [2008-present] in the contemporary period. The China Exim bank is at the forefront of the financing of the various projects in the DRC. Just after emerging victorious from the 2006 general elections, Joseph Kabila announced this cinq chantiers (five work sites) that were going to be the principal pillars of his development policy in the DRC. The Chinese
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loans into this development policy have assisted a lot in terms of his government ending up meeting some of the ambitious goals he has initially set. The Sicomines deal in particular and unfortunately has been mistakenly understood as a grant although it is a loan that will be reimbursed through the granting of the necessary concessions (Tshilombo, 2007).
Admittedly, in most of the organised joint ventures between both countries, the Asian giant always emerges victorious in amassing two-thirds of the voting powers in the venture boards, leaving the DRC with only one third. This is one of the significant points of departure in the determination of the terms of reimbursement. As understood broadly by Brautigam (2011), the government in Beijing utilises a different set of tools for the facilitation of its international economic engagements and the Sicomines deal has been one of the more prominent exemplars of this. This is because of the political backing of the Chinese SOEs’ request for mining titles by the government in Beijing.
One may argue that such political backing has the ramifications of making DRC access even more loans for the infrastructural refurbishment as it continues to even be more indebted. This deal’s arrangement as unfamiliar as it is in the DRC has formulated uncertainties over the labelling of the agreement since its initial inception, regarding whether it is an aid agreement, investment deal, trade agreement or all three. This section as it seeks to showcase the contemporary Chinese trade and economic engagement with the DRC then dwells into how well this agreement has depicted the components of the development assistance (in OECD-DAC terms) and investment although not that well distressed with trade (how the extracted minerals are to be sold and to who).
Going by the OECD-DAC standards, any loan to a developmental nation-state ought to be comprehended as an ODA if it is apportioned by different official agencies including the state, provincial and governments or even administrative agencies. That is then arranged with the economic development promotion and welfare of the developing nation-states as its predominant objective. Also, it should be characteristically concessional and devolve a grant element of at least 25%. Most of the loans characterising the ongoing Chinese trade and economic engagement with the DRC are fortunately provided by the China Exim Bank is administered and owned by the government in Beijing to make it seem like an official agency (Corkin, 2011).
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As both China and DRC continue to have stable political and strategic inter-relations, China will continue with the promotion of the credit line as wrongly interpreted to finance the post-conflict reconstruction in the DRC and promotion of economic development whilst the opposite is true. To both Marysee and Geenen, the general Chinese investment into the DRC was also made by private companies (Marysee &
Geenen, 2009). The investment as-it-is of private character is not disparate from other large-scale ventures operations in the mining sector of the DRC. In connection with the trade component, the connecting lines between the Sino-Congolese and the Sicomines agreement trade flows are only indirect. This is because of the mineral products that may be sold on the global market and/or simply to China, as it is the context for all mining companies with operations in the DRC, although this is not modulated in the initial agreement (Rapanyane & Shai, 2019b).