JOHANNESBURG (miningweekly.com) – China sees pleasing Africa as a form of insurance against trade war impacts, Sydney University Associate Professor Dr Lauren Johnston spelt out at the London Indaba, the annual event organised by South Africa’s Resources4Africa.

“China has invested dramatically in domestic electrification, ranging from manufacturing cars to building solar panel installations everywhere. It has tried as much as possible to make its economy resilient of oil and gas imports. On top of that has been the drop off in demand for China’s exports and the combination of those two aspects means that, going forward, China's demand for oil and gas and other commodities is very, very different from how it was in the past,” Johnston told the event covered by Mining Weekly.

Speaking from Melbourne Airport ahead of a flight to West Africa's Ivory Coast, Johnston pointed out that following the launching by the US of the first trade war during the first term of President Donald Trump, China promised Africa that it would launch the China Africa Trade Forum, which took place last week in Changsha, the capital of Hunan, the location that has given rise to the far-reaching Africa-focused round-the-clock rollout of China’s all-embracing and vibrant Hunan model.

As it turns out, China’s model from Hunan is a huge new source of trade growth amid China embracing Africa as its prime long-run growth collaborator to offset US trade loss, Johnston highlighted.

The province of Hunan is where China solved it's agricultural issues. It's the home of the green revolution, a sort of Nile basin of China, and it has a lot of minerals of its own.

Hunan is the home of Sany, which provides heavy industry equipment including from its considerable South African base. It’s also the home of BYD, which provides electrified vehicle mobility, as well as being the home of China's green railway industry.

“The Hunan model is now this amazing model where China is focused on every aspect of how they can develop China-Africa ties, not only driven by this structural change in China and pressure from America and the West wanting new growth models, but also driven to unlock every obstacle in the way of advancing China-Africa ties,” Johnston explained.

“There's this huge ‘going out’ model into Africa, which is totally perfectly primed to tap into Africa’s resource nationalism.

“China has very close political ties with countries in Southern Africa, so that's South Africa, Namibia, Tanzania, Mozambique and Zimbabwe, all countries governed by liberation movements, and therefore China has a background of close political ties and a central leadership school just outside of Dar es Salaam in Tanzania, where they build these ties.

“They bring leaders to dialogue on how they're going to develop the region. All of that not only goes into helping China to avoid trade war impacts, but given that China has also electrified itself to diminish its own need to import raw commodities, China sees that pleasing Africa is a form of insurance against these trade wars,” Johnstone added during a panel discussion headed by Herbert Smith Freehills Africa chairperson, South Africa’s Peter Leon.

Leon: From a mining perspective, how do you see that Hunan model playing out?

Johnston: Zimbabwe and Tanzania are both fascinating stories because China has such deep ties with the two of them. One of the things about Zimbabwe is that it's a very useful place for China's green energy railway and green car companies. Given the green transportation link in Hunan, there's a whole zone dedicated to overcoming the problems of China-Africa trade and investment – 24 hours a day, 365 days a year. Then Tanzania is a gateway to a much bigger region, and a political stability heartland. Hence, they've opened technical and vocational education and training schools there with lots of educational models. But I'd say the Zimbabwe link probably has the potential to be the Indonesia story first, driven by companies in Hunan and the Hunan model.