US-China Détente: The Thucydides Trap and Africa

US–China détente may be back, but Xi Jinping warns Washington to avoid the Thucydides Trap also as Taiwan tensions simmer. Markets applauded the Trump Xi Jinping meeting as Xi said the doors for US Business will only open wider and that consensus was reached to keep trade ties stable. But what is the Thucydides trap and what does this mean for Africa?

From the Africa Forward Summit in Kenya to Kigali’s Africa CEO Forum, the message is clear: Africa is back and attracting investor attention, but scale and integration—not rhetoric—will draw capital. Governance, infrastructure, power, skills, and education will determine the winners. Africa must also close the digital gap or face the serious risk of being sidelined in the technology race.

Transcript

A busy week for global and business diplomacy whether in Beijing, Kenya, or Kigali, as a renewed China–US détente unfolded and Africa showcased an emerging investment destination.

But what could the bull do in a China shop … apart from tread gently.  Xi Jinping warned America to be cautious not to fall into the Thucydides trap. The Trap metaphor asserts China as a rising power in a narrative with the rising force threatening to displace the ruling power, the US … causing tensions that lead to war. And It comes from the ancient Greek historian Thucydides, who wrote concerning the Peloponnesian War where the rise of Athens inspired fears that eventually made war inevitable in Sparta.   Later Harvard Political scientist Graham Allison in 2017 from his research found that out of 16 cases since 1500 where a rising power challenged a ruling power, 12 cases ended in war. So how does all this affect Africa - also as CEOs and political and thought leaders met at the Africa CEO forum 2026 in Kigali focused on the idea that scale is no longer operational, but the first line of defence where capital is concentrating in larger integrated markets. An integrated Africa can be the world’s next big investment bet.

Hello, this is global business insights where we bring perspectives that help to navigate the more challenging context. We look today at how nations are recalibrating investment postures and especially why the unfolding US China détente matters.

Xi said the US and China must avoid a path to war, warning that any mishandling of Taiwan could place a fragile détente in “great jeopardy”. US Secretary of State Marco Rubio said the US is not trying to contain China, but to use its capital, talent, and private-sector strength to drive innovation and widen the lead Beijing wants to close. One view is that China has used domestic capability and the global system the US helped build after the Second World War to challenge American economic leadership more openly. In response, the US is now protecting itself by pulling back from some of those arrangements and targeting parts of China’s geopolitical support network, including Iran and Venezuela. Today’s America is increasingly transactional: it is not seeking a strategic marriage with China. What it wants is a workable relationship that avoids a conflict neither side would benefit from.

For Africa, a less accommodating and less multilateral America means the old Bretton Woods mindset no longer fits. By bringing in top CEOs, the US is now signalling that it is in a different battlefield: technology and economic competition.

What should Africa learn? The €23 billion France–Africa summit and the shared-ownership debate in Kigali must move beyond selling promise and untapped potential. The real task could be to solve concrete problems: weak infrastructure, especially electricity; growing distrust among African states; slow regional integration; and fragile governance and political institutions that still lack accountability. The US and China may already have fallen in a Thucydides Trap, but this contest is unlike the Spartan war. Today’s struggle is increasingly being fought with trade, technology, and economic leverage. That explains why the US is fielding corporate heavyweights from Citigroup, JPMorgan, Nvidia, Apple, Microsoft and SpaceX. 

As the US and China race to lead the AI and digital revolution, the digital and wellbeing gap between the West and Africa will widen quickly. Africa’s political and business leaders must recognise that closing these gaps will require investing heavily in skills, education, infrastructure, and the fight against hunger and poverty.

Nigeria’s President Tinubu puts it colourfully … “If an African Child is assured of a Good Sandwich and a Classroom or 1 Egg a day, there will be no Fear of learning”.

Instead of embracing knowledge, there is still fear that education will create new forms of dependence instead of dismantling old ones. Progress in learning, research, and education is very gradual. China and the United States reached their current positions only after decades of sustained discipline. There are no short cuts. Africa must educate all its citizens and equip its young people with the skills needed for the future. The high cost of ignorance and weak infrastructure should be a wake-up call in a fast-changing knowledge economy that will not wait for Africa.

So far we hear China will help to resolve the Iran war, will buy more oil from the US, buy 200 more Boeing jets, and will buy more US designed chips and Soy beans and agricultural products. The US is already easing restrictions on Chinese access to Nvidia chips. The US are not afraid of collaboration as long as it does not hinder extending the technological lead.

Africa can also learn that strength earns respect. Despite Beijing’s lapses and Washington’s quirks, China’s discipline and undisputable rise have drawn global business and political leaders to a state dinner in Beijing, reinforcing its status as an equal power. Xi Jinping spoke of partnership rather than rivalry as a path to stability, peace, and progress, while warning against interference over Taiwan. Trump, unusually respectful and cordial, praised US–China ties as he invited Xi to the White House on 24 September. As details are being worked out, both sides may still find more mutual gains.

Africa cannot be a bystander in the technology-driven competition shaped by enterprise and digitisation. It must earn respect in that arena or risk being collateral damage as US–China tech rivalry deepens divisions within the continent and undermines its cohesion. Africa needs bold defensive and niche attack strategies built on its own strengths, resources, and talent. It should expect less aid and fewer concessions, mobilise more capital from within the continent, and make integration its highest priority.  Improving governance is essential. As Nnamdi Obasi, Nigeria Senior Adviser at the International Crisis Group, wrote in Foreign Affairs, weak governance at federal, state, and local levels fuels Nigeria’s security crisis. He argues that sustained investment in governance and institutional capacity could reverse that decline and limit the spillover effects of worsening violence on neighbours and international partners.

Strip away the theatre, and the picture is stark. Beijing remains deeply skilled in propaganda, strategic deception, and operating with limited political accountability. The Communist Party was built on a narrative of resistance to Western power — and that historic mission still echoes through its ambitions even today. Now, as China’s commercial, technological, and security interests stretch from Arctic sea routes to Gulf oil supplies, the stakes are rising fast. And as those interests come under pressure, Beijing may find itself pulled ever deeper into intervention — not just to defend its position, but to shape the global order it believes it needs to catch up with, and ultimately overtake, the United States.

My view is that Africa may soon face a more assertive, China-led investment push, offering the capital Africa urgently needs but likely expecting political alignment in return. That could still benefit Africa—if the terms are right, the priorities are clear, and the relationship is managed carefully.

Still on Africa, Aliko Dangote has confirmed rejecting an offer from the Nigerian National Petroleum Company Limited to increase its stake in the Dangote Petroleum Refinery. NNPC currently holds about 7.25% of the refinery rather than its planned 20%. Dangote Refiinery already announced plans for an initial public offering to allow wider Nigerian ownership

To some data releases … US retail Sales rose by 0.5% on a monthly basis in April to $757.1 billion. This came after the 1.6% increase (revised from 1.7%) recorded in March, also in line with the market expectation.  Some good news, UK Gross Domestic Product growth accelerated to 0.6% in Q1, from 0.2% in Q4 last year; and monthly data also surprised with a 0.3% MOM growth, against expectations of a 0.2% contraction. The pound remains weak due to political instability, as Starmer faces mounting pressure despite GDP data easing some fears of a sharp downturn linked to the Iran war. Crude Oil prices were flat, brent still over $100 as markets noted China’s offer to support the US to resolve the crisis amid news of flaring tensions as a ship is seized and another is sunk near the strait of Hormuz.

Back to Beijing: Xi reportedly welcomed U.S. interest in doing more business in China, saying that “China’s door will only open wider.” Tesla’s Elon Musk, Nvidia’s Jensen Huang, and Apple’s Tim Cook were all said to be upbeat about the summit. There is clear optimism around AI, technology, and especially chip stocks as attention turns to possible opportunities, despite the still wider tensions — including the war in Iran and the issue of Taiwan.

Meanwhile, markets are reading the shifting dynamics positively as Trump's trip to China fuels hope of better trade between the two nations. On Wall Street, the S&P 500 and Nasdaq also gained ground, hitting new record highs, helped by a jump in Nvidia shares as it was reported that the US govt. cleared about 10 Chinese firms to buy ​its second-most powerful AI chip, the H200.  European markets also finished the day higher.

President Xi confirmed that both sides reached important consensus on keeping trade ties stable after a final meeting just before Trump departed for Washington today.

Kevin Warsh is now finally confirmed to serve as the 17th chair of the Federal Reserve, as Jerome Powell bows out from that role today – while he still remains on the Federal Open Market Committee as a Governor.

Well that’s it on this special episode of global business insights. We are now on Spotify, Apple podcasts and most popular podcast platforms so do please support us. This is Bode ososami, thanks for watching and please follow and hit the notification button. Bye Bye.