US Makes Small Investment in Madagascar Rare Earth Project to Counter China

 Reuters published on 28 July 2026 an article titled "US Backs Madagascar Rare Earths Project in Push to Loosen China's Supply Chain Grip."

The US International Development Finance Corporation agreed to commit up to $4.84 million for pilot plant work, laboratory testing, and environmental programs of a $150 million rare earths project in Madagascar.  The deal highlights Washington's effort to develop alternative sources of minerals controlled by China.  

Is State Capitalism Best Way to Compete with China for Critical Minerals?

 The Washington Post published on 28 March 2026 an editorial titled "Yet Another Step Toward State Capitalism."

The US International Development Finance Corporation has taken a 20 percent stake in a graphite mine in Mozambique to counter China's control of the world's supply of graphite.  This is a tactic the Trump administration has used in other deals to control critical minerals.  The editorial asks if this is the best use of taxpayer funding when they will be left holding the bag if the company fails.  

US-Africa Partnership to Counter Chinese Supply Chain

 The National Interest published on 7 October 2025 an article titled "How Africa Can Shift Supply Chains from China" by Daniel Swift, Freedom for Defense of Democracies.

The author concludes that Congress should seize the moment to create a new US-Africa partnership model that relocates specific buyer-driven light manufacturing supply chains from China to Africa.  

US Seeks to Challenge China's Influence in Angola

 The South China Morning Post published on 9 December 2023 an article titled "US Makes US$2 Billion Commitment to Angola as Oil-rich Nation Eyes Move Beyond Chinese Funding Model."

China has funded most infrastructure projects in Angola this century.  The United States is set to finance $2 billion worth of solar power, bridges, internet network, and the Lobito Corridor Railway Line from Zambia to the Angolan coast via the Democratic Republic of Congo.  The project, which includes European Union participation, is seen as a counter to China's Belt and Road Initiative.  

China's Investment in African SMEs

 The Center for Strategic and International Studies published on 15 October 2021 a paper titled "China and SMEs in Sub-Saharan Africa: A Window of Opportunity for the United States" by Daniel Runde, Conor Savoy, and Janina Staguhn.

The paper points out that most of China's economic engagement (not investment) with Africa has been in the form of trade and loan financing for large infrastructure projects.  While its foreign direct investment (FDI) in Africa has been growing, it remains modest.  Chinese FDI in African-owned small and medium-sized enterprises (SMEs), either directly or through intermediaries, is even more limited.  This provides an opening for American FDI.  

US Prosper Africa vs China's Belt and Road Initiative

Brookings published on 26 June 2019 a commentary titled "Can Trump's Prosper Africa Make America Greater Than China and Other Partners in Africa?" by Landry Signe, Africa Growth Initiative, and Eric Olander, China Africa Project.

Prosper Africa aligns with the Trump administration's Africa strategy, which aims to promote prosperity, security, and stability in U.S.-Africa relations by prioritizing trade and investment. Its success relies overwhelmingly on the U.S. private sector, which historically has been reluctant to invest in Africa unless there are strong prospects for making a significant profit.

The US International Development Finance Corporation, Africa and China

The Center for Strategic and International Studies (CSIS) published on 12 October 2018 a useful discussion of the new US International Development Finance Corporation (USIDFC) titled "The BUILD Act Has Passed: What's Next?" by Daniel F. Runde and Romina Bandura.

While it is generally acknowledged that the USIDFC is a response to China's increased financing of projects globally, some accounts suggest this new agency can match what China is offering. Thi CSIS study makes clear that the USIDFC is a significant new tool for the United States but not equivalent to what China has been doing and continues to do. USIDFC merges the Overseas Private Investment Investment Corporation (OPIC) and several pieces of USAID. It raises the spending cap of the former OPIC from $29 billion to $60 billion for USIDFC, which can make loans or loan guarantees, acquire equity or financial interests in entities as a minority investor, provide insurance or reinsurance to private sector entities, and provide technical assistance.

Like OPIC, USIDFC has a global reach. Between 2000 and 2014, only 18 percent of OPIC's total commitments went to Sub-Saharan Africa according to a study by the Center for Global Development. In 2017, 27 percent of OPIC's portfolio was devoted to Sub-Saharan Africa. As of the beginning of 2018, just over $7 billion of OPIC's cumulative portfolio supported projects in Sub-Saharan Africa. This contribution to African development has been important and is destined to increase under the more generously funded USIDFC, but it has a long way to go before it competes with Chinese funding. China announced a $60 billion, three-year financial package for all of Africa in 2015 and another $60 billion, three-year package in 2018. While the funding by China and the USIDFC is not entirely comparable, the difference in amounts is stark. One way the United States can help address this gap is to revive and increase funding for the US Export-Import Bank.