Saturday 22nd of June 2024

Peak China, A Declining USA And The Future Of Africa
Jakkie Cilliers
Region : America, China, Africa, Economy,
Issue : Politics,
Indices to measure soft, hard and smart power are back in vogue to the extent that the Economistmagazine devoted two recent editions to its forecasts of China’s power potential (finding that it will shortly peak) and that of the United States (which it argued would remain globally dominant).
At the Institute for Security Studies’ African Futures and Innovation programme, we come to somewhat different conclusions using the integrated International Futures forecasting platform (IFs). Using IFs, we recently published a set of global forecasts on how events in the rest of the world could unfold and the impact on Africa two decades into the future. We discussed these alternative scenarios at SIPRI’s 2023 Stockholm Forum on Peace and Development.
Again, Africa has become an area of competition, this time primarily between China and the West, with important implications for the continent’s development potential given the dire impact of superpower competition previously. Russian destabilization also affects Africans through the activities of the Wagner Group and election interference, among others. A long-term view is, however, that its war on Ukraine will inevitably diminish Russia’s status globally, including its role in Africa.
Instead of the dramatic reductions in Chinese growth in the years ahead and a future of parity in economic size between China and the USA, we foresee the Chinese economy overtaking the USA’s in size within about a decade. By the early 2040s, China will surpass the USA in hard power potential. At that point, China will be the single most powerful country in the world. This delay between becoming the largest kid on the block and the strongest kid is down to the considerable time it will take China to match the stock of historical investments the USA has made in its military and to displace the dollar as the global reserve currency.
Our view is that the Economist‘s obsession with the single-country top-dog status of the USA is therefore misplaced. In our two extreme scenarios, ‘a Growth World’ and ‘a World at War’, gross domestic product (GDP) per capita in China is only 40 or 30 per cent of that in the USA by mid-century. While American dominance is in structural decline, the West will likely continue to dominate globally in wealth, technology and global power stakes since it consists of a number of like-minded, high-income countries, including some in Asia. At the same time, many countries in China’s neighbourhood are at odds with the emerging giant and fearful of its growing influence. China will never achieve anything close to the role played by the USA in recent decades.
Doubling down on authoritarianism under Chinese President Xi Jinping will likely also prove self-defeating. There is no replacement in sight for a system where all people have a vote on who governs them. Populism, like terrorism, Covid-19 and other recent concerns, will run its destructive course in the West and be replaced by another sense of crisis in today’s hyper-connected and rapidly changing world. It is unlikely to end the democratic project.
Implications for Africa
In our assessment, the next two decades will bring a more complex, multipolar and less Western world, one in which regional rather than global connectedness is growing. What does this mean for Africa?
Clearly, the pressure for Africans to choose sides in the increasingly acrimonious struggle between China, Russia and the USA does not serve African interests. Africa is now almost equally connected with the European Union, the USA and countries from the Global South (China and India, among others), and the economic momentum is with the latter group. The value of exports from sub-Saharan Africa to China has increased tenfold over the last two decades. China has emerged as an essential source of financing for African countries.
Meanwhile, aid—mainly from EU members and the USA—has fallen from peaks of about 6 per cent of Africa’s GDP in the 1990s to an average of only 2.5 per cent in the past decade as Africa’s economies have increased in size. Aid remains essential for poor countries, but it can no longer purchase loyalty (and votes in the United Nations General Assembly), as it could before the collapse of the Berlin Wall.
More important than aid is foreign direct investment (FDI). Although flows have declined, the stock of FDI from the West in Africa is much larger, and the potential for significant future inflows is greater. China only accounted for 6 per cent of FDI stock in Africa as of the end of 2020, although flows have accelerated in recent years.
Africa accounts for around 3 per cent of global GDP (at market exchange rates). In our most aggressive growth forecast, Africa could almost triple that portion by mid-century. At that point, its population will have increased from 17 per cent of the global total to around 25 per cent, adding to its attraction as the last remaining and growing untapped consumer market. But even in an aggressive growth scenario, most of the world’s extremely poor people will still live in sub-Saharan Africa, and the region will continue to lag on most development indicators. Yet, with the African Union, its 55 states, and an integrated free-trade area, Africa would have a much larger global voice and be an attractive investment destination.
If Africa wants to grow, reduce poverty and provide jobs for its large working-age population, it must trade and engage with China, Europe and the USA and increase its relations with the emerging South but do so on its own terms, much as China has done. It must set clear investment standards, institute full transparency for all government contracts, and insist on taxes being paid where multinationals operate, as well as knowledge transfers and local ownership requirements.
But above all, inclusive economic growth in Africa requires global stability, particularly an end to the competition between China and the USA for influence on the continent, including efforts to align foreign policy orientation on matters such as Taiwan or Ukraine.
Instead, development in Africa requires the international community to knuckle down and make the hard choices necessary to create a future that accommodates all of humanity, particularly reform of the global financial architecture as outlined in a recent and bold UN policy brief.
In all of the above, Europe steadily emerges as the swing region globally, moderating and bridging these global divisions. Its future is inevitably closely tied to that of Africa through history, migration, the resources to power the Fourth Industrial Revolution, trade, and the normative impact of policies on data privacy and climate justice.
About the author: Jakkie Cilliers is the founder and former executive director of the Institute for Security Studies (ISS). He currently serves as chair of the ISS Board of Trustees and head of the African Futures and Innovation (AFI) programme at the Pretoria office of the ISS.
This article originally appeared in SIPRI
The views expressed above belong to the author(s

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