China-Algeria Relations: win-win development, or neo-colonialism?

by Aparna V Pillai · 11th May 2022

Image source: Getty

Algeria’s colonial past and its dependence on Europe

Algeria had been a French colony for 70 years, France occupied Algeria on July 5, 1830. The colonial rule continued till 1962. The 132 years of torturous colonial rule of France over Algeria, proved to be beneficial for the former, as it played a seminal role in developing the French economy with its rich reserves of oil, gold, iron, coal and various minerals. The colonial rule imposed on Algeria can be defined as violent and a state of “mutual incomprehension” between the rulers and the ruled. As per the analysis of Talilani, the amount looted from Algeria due to the French colonisation will approximately be 80 Million francs. Algeria gained independence from France in the year 1962, but the French influence continued to linger in Algerian economics, politics and trade. France continued to provide immense economic aid to Algeria even after its independence under the pretext of ‘cooperation’. On further observation, it can be inferred that the step taken by France is rather strategic, Algeria is the second-largest country in Africa and is rich in natural resources, which will continue to be beneficial for the French economy. Economic and trade relations between the two countries have grown rapidly since 1999, Algeria is the leading trade partner of France in Africa and is the third-largest market for French exports. As per 2019 statistics, France has a market share of 8.7% in Algeria and the total value of exports is 4.98 Billion euros. Though Algeria has deeply entangled trade connections with France, the country has also expanded trade relations with Europe. Algeria has exported $14 billion worth of non-oil goods to the European Union countries and has imported goods worth $220 Billion. European Union continues to be Algeria’s leading trade partner accounting for nearly 67% of its international trade and 44% of its total imports. Algerian exports to the European Union have increased from $15 Billion to $36.3 Billion, out of which 97% is accounted for hydrocarbons, 2% for manufactured goods and 0.4% for food products. The trade value figures between the European Union and Algeria are the largest in North Africa. The relationship between the EU and Algeria is both tactical and natural, as the latter plays a pivotal role in regional stability, has a powerful army, geographical propinquity and geopolitical interdependence make Algeria competent to mitigate the security threats faced by the EU. The amicable relations with European Union have helped Algeria in improving its image in the global arena and coming out from international marginalisation.

Algeria’s relations with China- trade and import values

China and Algeria share a long history of friendship, diplomatic relations and mutual trust. China has always been a diplomatic priority for Algeria and has always been a constant support for china. The bilateral relationship between Algeria and China began at the Afro-Asian Bandung Conference in 1955. China established ambassadorial relations with Algeria in 1958 and the latter’s support extended to China in restoring its seat in the United Nations Security Council in 1971, bolstering the relations between the countries. The People’s Republic of China was the first non-Arab country to have recognised the Algerian Provisional Government declared by the Font de Liberation Nationale (FLN). Sino-Algerian trade relations have grown appreciably since the 2000s. The bilateral trade volume between the two nations reached up to $292 Million. In 2019 Chinese exports to Algeria reached up to $7 Billion and Algerian exports to China were approximately $1.2 Billion. The trade relations between the two countries are instrumental in developing both formal and informal economies using commercial exchanges – increasing the number of direct and connecting flights establishing new trade routes and China exclusively imports manufactured products from Algeria. Presently China is the largest source of imports for Algeria, overtaking France. Despite the deepened trade relations between the nations, a large trade balance perpetually exists, Algeria recording accumulated trade deficits. Algeria’s courteous and cooperative relations with China aimed at accelerating the country’s pace of industrialisation, thereby improving the potential for independent development.

Participation in BRI and exploitation

Algeria is a key geopolitical player in the North African region, thereby making the country a strategic member nation of the Belt and Road Initiative. Algeria is a geostrategic location, considering its proximity to Europe, access to the Sahel and the sub-Saharan region, Algeria’s political influence in the Mediterranean and the African Union, which makes Algeria a prudent partner for China. “Algeria and China work together through Plurilateral Co-operation fora such as the Forum on China Africa Co-operation (FOCAC) and the China-Arab States Co-operation Forum (CASAF)”. By joining the Belt and Road Initiative Algeria and China have reinforced cooperation in economy, trade, investments, energy, mining and infrastructure adhering to the BRI framework. China is investing in the development of El Hamdania Central Port, which will be Algeria’s largest and first deepwater port, El Hamdania has the potential to be the regional hub for North Africa in the Mediterranean and can pose a challenge to the Tangier-Med port in Morocco. The El Hamdania port of Algeria will have a capacity of 25 million tons per year and 23 terminals which are capable of handling nearly 6.5 million 20-foot containers. The project budget for the construction of the port by China is US$ 3.3 billion, the El Hamdania is coming with new business prospects in port development and equipment sectors as well. As per the MoU signed for the project, the China State Construction Engineering Company (CSCEC), China Harbour Engineering Company (CHECH) and the Algerian Port Authority have committed to the project, in exchange for Chinese financing, under the condition that the port’s operations are controlled by China for the first 25 years. Nearly 1000 companies have started functioning in Algeria, the Algerian government intends to enhance its digital and information infrastructure, through the aid of Chinese companies – Huawei, ZTE- Corporation and BEIDOU, which play a significant role in the plan of extensive digitisation and communication systems. Chinese companies are exploiting the resources of Algeria, such as mining phosphates, gold, uranium, zinc and iron which is beneficial for the mutual development of both the countries.

Though the Belt and Road Initiative intends to develop countries, it is an indirect establishment of Chinese hegemony disguised in trade dealings. China is creating allies through its strategy of debt-book diplomacy by gaining control over the country’s trade and economic dynamics. The relationship between Algeria and china will continue to go steady and stronger, but in the due course, Algeria will be economically submissive and dependent on China, posing a severe threat to the European Union member nations’ security.

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