In 2013 France lost its historic position as Algeria’s primary trade partner to China, this little noticed milestone is representative of a wider trend in North Africa as Beijing’s economic grip takes hold across the region. In common with many other emerging economies the balance of trade also lies with China, which exports value added manufactured items such as vehicles, machinery and electronic equipment, (notably Algeria is China’s biggest car market), while Algeria sends (much less valued added) mineral fuels, oil and distillation products east bound.
The total volume of trade between the two now stands at US$ 7 billion and China is also embarking on considerable investment in the country – for example Chinese vehicle manufacturer FAW is constructing an assembly plant in Algeria, building on the success of exporting cars to the country.
From Algeria’s point of view the rapidly declining US market for its hydrocarbons means that China’s ability to fill the gap is even more important. In defence terms Algeria has the biggest defence budget in Africa and while Russia is currently its biggest supplier of military equipment, it is now looking to buy more from China, including new toys such as unmanned aerial vehicles (UAVs). The country faces several challenges in its unsettled Sahara region, Islamic militants, the spill over from the war in Libya and the desire to suppress opposition groups all means that internal security is a big priority for the government.
Politically authoritarian Algeria comfortably aligns with China, the ties between the two run deep as Communist China recognised early on in its existence the GPRA, the revolutionary group that eventually overthrew French colonial rule and established a new state. Now the Algerian leadership are very much against any political change in the country and view the recent Arab Spring uprisings with fear and trepidation, at the same time there is potential for change at the top and perhaps a power struggle with the ageing Bouteflika (77 years old and now in his fourth term as President) visibly ailing.
The ongoing conflict in Libya was a reminder that unrest is commonplace in this part of the world , although they are renowned for their tolerance of risk and ability to work in tough conditions, Chinese firms were eventually forced to pull out of the country. While Algeria is calm for now the situation could easily change and China’s assets come under threat, raising the question, how far will Beijing go to protect its assets?
Chinese firms have been heavily involved in developing Algerian infrastructure, their reputation for doing quality work, quickly and at a good price is well established across the continent. Currently the biggest project is a railway from the East to the West of the country, which is under the aegis of the China State Construction Engineering Corporation. There are estimated to be around 50,000 Chinese citizens in the country, some working on major construction projects, others have left China for a new life and have set up small businesses and restaurants across the country.
Airports and Opera Houses
China has taken the opportunity to take part in some stadium diplomacy, stumping up for a new airport in the capital, a new foreign affairs ministry and constitutional court, but perhaps most notably a new opera house in the capital Algiers, which has naturally raised eyebrows home and abroad. The fact that all these gifts are highly visible to those in power is no mistake, an everyday reminder of what China has done for the country to politicians and civil servants will do bi-lateral ties no harm at all.
Algeria and the Rising Powers
China is not the only rising power with an interest in Algeria, Russia has developed significant defence contract ties, as well as strong links with the oil and gas industry, Brazil has become a growing supplier of food products and India like China has become a significant customer for fuel products. While for now the majority of Algeria’s trade is with the EU nations, increasingly it is looking to forge partnerships in emerging markets and China is leading way.