From ‘Shithole’ to Superpower? Africa’s Role in th...

From ‘Shithole’ to Superpower? Africa’s Role in the China-US Economic Clash

The continent Trump dismissed may now be China’s secret weapon—and America’s blind spot. In the race for global dominance, Africa isn’t the prize. It’s the power play

Monica Cheru-Managing Editor

The short-term impact of US president Donald Trump’s tariff wars on the US and China emerged over the past few days, showing that one country is better positioned than the other to sustain the mid- and long-term battle.

Resilience and growth in China

This Monday (May 19, 2025), China reported a Q1 2025 GDP growth of 5.4%, surpassing expectations. Despite the fall in US orders, growth was primarily driven by manufacturing and high-tech sectors, with industrial output increasing by 6.5% and high-tech manufacturing by 9.7%.

This shows that China’s push to diversify its export market and cut its reliance on the US has been effective. Q1 2025 exports to ASEAN countries increased by 18%, and exports to Belt and Road Initiative countries rose by 24%.

Service sectors like tourism, transportation, telecommunications, and consulting maintained double-digit growth during this period, driven by strong holiday demand and post-pandemic recovery efforts.

The May Labor Day holiday figures showed Chinese tourists heading for Hong Kong, Japan, Macao, South Korea, and Thailand. Alipay spending surged, particularly in Switzerland (highest average per-user spending) and South Korea (average spending exceeded $100 per user).

China also saw a surge in inbound tourists driven by visa-free policies, seeing the use of Alipay+ partner apps rising over 100% year-on-year. With further visa relaxations kicking in next month, better results are expected for the second half of the year.

Not so rosy for the US

On the other hand, in the US, the offerings on the menu are bad news, bad news, or more bad news.

Moody’s downgraded the U.S. credit rating to Aa1 in May 2025, citing unsustainable debt levels now up to $36 trillion and rising interest payments.

The downgrade led to a sell-off in government bonds, pushing 30-year Treasury yields above 5% and causing a drop in the US dollar's value.

Meanwhile, Trump’s proposed tax-cut bill, which includes extending 2017 tax cuts and increasing defense spending, is estimated to add $3 to $5 trillion to the national debt over the next decade, giving rise to fear of more downgrades in the future.

The University of Michigan’s Consumer Sentiment Index fell to 50.8 in May 2025, the second-lowest level in 75 years (after June 2022), reflecting inflation anxiety, trade war concerns, and falling political confidence as sentiment among Democrats hit a record low at 33.9, while Republicans’ optimism also slipped to 84.2.

Tariffs are expected to increase consumer prices by approximately 2.9% in the short term, equating to a loss of purchasing power of $4,700 per household on average, directly impacting US citizens who are already struggling to maintain their lifestyles.

Analyses indicate that the imposition of elevated tariffs could reduce U.S. real GDP growth by 1.2 percentage points in both 2025 and 2026, bringing growth down to 0.5% and 0.8%, respectively.

The pain ahead

Both countries will inevitably suffer, a position China has acknowledged by repeatedly stating that there is no winner in a trade war.

Analyses suggest that if U.S. tariffs remain elevated, even with its stimulus measures, China’s GDP growth could decelerate to 4.3% in 2026 and 4.1% in 2027.

Nomura Securities estimates that the Chinese labor market could lose some 16 million Chinese jobs due to reduced exports to the U.S., particularly in sectors like electronics.

While China’s strong Q1 growth shows resilience, it faces challenges from reduced U.S. exports.

The US is bound to experience fiscal strains and market volatility due to credit rating downgrades and policy uncertainties.

Decoupling is happening

Despite a temporary 90-day tariff reduction deal with the US, which lowered tariffs on Chinese imports from 145% to around 30%, decoupling of the world’s two largest economies is happening.

Although the recent agreement reached by the two countries has created some reprieve, with stock markets somewhat rebounding globally, there is no indication of sustained improved relations by either side.

The Port of Los Angeles has indicated potentially lower inventories due to ongoing trade uncertainties.

The United Kingdom has now overtaken China as the second-largest foreign US Treasuries holder with $779.3 billion. China’s $765.4 billion holding, marking a reduction of $18.9 billion, confirms a steady multi-year trend of divesting U.S. debt, which reached a peak of $1.3 trillion in 2013.

Africa: The dark horse

The US will ultimately pay for ignoring Africa as it emerges as a significant player on the world economic stage.

Unlike Trump, who dismissed Africa as a “shithole country” in 2018, Chinese President Xi Jinping has invested in the continent. Except for 2025, Xi has traditionally kicked off his annual state visit calendar with a trip to Africa.

The Forum on China-Africa Cooperation and BRI have led to billions of investments in infrastructure by China, tying Africa’s development to the Asian giant.

China is now Africa’s largest trading partner, with 2024 volume reaching $296 billion, a 5% jump from 2023.

While the US has imposed tariffs on 23 African countries and pulled its development funding, China has removed tariffs on 98% of products from 21 African countries, facilitating increased imports and strengthening ties.

It is therefore not surprising that several analysts are predicting a higher year-on-year increase for 2025 China and Africa trade volumes.

Why the “shithole countries” do matter

Africa stands out with its robust demographic growth. In 2024, the continent’s population was approximately 1.5 billion, with a fertility rate of 4.1 births per woman—the highest globally.

Projections estimate that Africa’s population will reach 2.4 billion by 2050, accounting for over 60% of global population growth during this period in which countries like Japan and the US are already facing depopulation, with China set to join their ranks in the next 10 years, unless its counterstrategies result in a baby boom before that.

Beyond Africa’s youthful and growing population with its significant economic opportunities, the continent has another hidden superpower: its unrecorded wealth.

The informal economy, particularly in countries like Nigeria and Zimbabwe, indicates substantial economic activity and spending power that is often ignored by many analysts when they position the continent in terms of purchase power and other economic indicators.

Effectively, Africa has more high-net-worth individuals than those captured by lists like Forbes, which only use statistics based on publicly declared wealth and portfolios.

Additionally, the rapid infrastructure developments—mostly funded by China—and the adoption of renewable energy solutions, such as solar power, are creating a growing critical mass of quality consumers daily.

While no statistics are readily available, the proliferation of shops selling household gadgets like fridges, laundry machines, and dishwashing machines in countries like Zimbabwe shows a steady upgrade in living standards and demand for such goods.

China can easily reorient its industry to supply this emerging African market to help make up for the deficit being created by the US tariff barriers.

China also has better access to Africa’s vast natural resources, including key minerals like lithium, copper, and cobalt, putting it way ahead of the US in the modern and future industry supply chain.

As both a growing market and a supply chain player, Africa will be a significant factor in the outcome of the tariff wars, and China has its bases fully covered.