When two trade partners bicker, a third might well benefit handsomely. 

• Africa’s green economy is impacted by a trade war in the northern hemisphere. 

• Might the continent become more proactive to maximise the benefits as a third party?

The details: China faces fast growing trade barriers in the west on green economy products. 

• The US and Canada imposed 100% import duties on Chinese electric cars.

• The EU has its own, lower but still punitive measures, including on solar panels. 

The why: Trade spats can be complex, but not the reasons behind this one:  

• China fails to play by the rules when subsidising its green industrialisation.

• Western governments fear domestic manufacturers can’t handle the competition.

• The US wants to thwart China’s moves to dominate major new technologies.

Big shock: China is belatedly recognising the loss of access to important foreign markets.

• This is tricky for Beijing, having poured $230 billion in subsidies into the making of electric vehicles (EVs) alone. 

• The result has been massive overcapacity; production outpaces domestic demand. 

• Most makers have excess stock and need to export somewhere to stay alive. 

Ever pragmatic: Chinese leaders are now focusing on Africa. 

• They’re moving from funding African infrastructure to boosting trade in goods.  

• Green goods including EVs and renewable energy kits are a particular focus. 

Evidence of change: More than 50% of Chinese loans to Africa last year went to banks funding trade. In previous years, banks only got 5% while the bulk went to governments for building bridges and roads.

• In 2023, renewables got half a billion dollars – a sea change from previous rounds.

• The $4.6 billion in overall Chinese loans last year is the highest sum in recent years. 

More evidence: Chinese interest in Africa’s green economy is spurring additional investment on the continent. Other investors are following suit. 

• Electric mobility overtook fintech as the top investment sector this year. 

• Cleantech ranked third in investment numbers. 

Positive impact: Africa’s green economy is the lucky (and hard-working) beneficiary of a 21st century superpower spat, potentially heralding a new era in China-Africa trade. 

• Chinese overcapacity is pushing down EV and solar prices for African consumers. 

• New models will reach Africa sooner; no more wait for what’s unwanted in the west.

• Chinese manufacturers will pay more attention to local needs and adapt products.

Caution though: Don’t let domestic businesses on the continent be overrun in a stampede.

• The trade benefits for Africa are welcome but there is a danger of getting trampled.

• AU countries may need to step up and create (light) green industrial policies.

• Governments could well shape the new trade flows.

Lessons learnt: China itself imposed such policies when it stepped up trade with the west. 

• Four decades ago Beijing started insisting that western manufacturers who want to reach the Chinese market must transfer some of the relevant technology. 

• African governments could insist on local assembly of goods and local components.

• And require local training initiatives and the building of EV charging networks.

• Pan-African coordination could stop China playing countries off against each other. 

Stepping back: However things turn out, it seems clear that Africa’s green economy is gaining significance, hooked up to Chinese rocket boosters. 

• About time. Climate change is depressing Africa’s traditional economy by 5% p.a.

• And China’s loss of access to western markets will set back global decarbonisation.

2. Cheat sheet: Three Chinese industrial pioneers in Africa