Background
Like other African countries, Liberia’s commercial engagement with China has increased substantially over the past few years, exemplified by the signing of the $2.6 billion Bong mine deal between Liberia and a Chinese consortium—the single largest investment in Liberia. Given China’s growing stature in the global economy, the trajectory of its investments in Africa and the opportunities in Liberia, the potential exists for increased FDI, trade, and other commercial activities between China and Liberia. To maximize Liberia’s gains in its engagements with China while managing the downsides more effectively, ACET is working with Liberia to craft a strategic framework to guide this relationship.
Tasks
- Support Liberia in developing a strategy for a relationship with China that ensures the maximum benefit for Liberia
- Support Liberia in rallying other African countries to do likewise
Challenges
Liberia shares the challenges of many other African countries concerning China: it is a small country emerging from conflict and with limited capability to this emerging superpower on a level playing field.
ACET’s approach
This work has built upon an ACET study on the nature and scope of China’s economic engagements across Africa. ACET followed that study with in-depth analysis of the engagement specifically with Liberia and turned it into strategic recommendations for GoL.
Findings/recommendations
ACET is working with GoL to determine policy reforms that will lead towards an optimal economic relationship with China. To expedite the process, ACET is supporting Liberia to develop a catalogue of projects to promote for investment.
The studies also have underscored the need for a regional approach to dealing with China, through bodies such as the African Union (AU) and regional economic commissions. Taking the initiative to bring this about, ACET is working with GoL to make a presentation at the next AU Summit in 2012 to influence other African countries to be more proactive and strategic in their interactions with the Asian giant.