In April 2025, North Africa is wrapped in a “diplomatic storm”.Algeria and France expelled each other’s diplomats, the Sahel region drone friction frequently, Morocco’s border disputes escalate again – this triple crisis not only reflects the country’s “anti-colonial heritage” and “regional hegemony gameThese three crises not only reflect the country’s “anti-colonial heritage” and “regional hegemonic game” of deep-seated contradictions, but also touch the pulse of Chinese enterprises in Africa.
As the largest country in Africa, Algeria’s foreign policy has always been a difficult balance between historical trauma and practical interests: on the one hand, it has taken a tough stance against interference under the shadow of French colonization, and on the other hand, it has fought for regional discourse in the Sahelian counter-terrorism cooperation; on the one hand, it has pried up the geopolitical relations in Europe by means of energy exports, and on the other hand, it has deepened cooperation with China and Russia by means of the strategy of “looking east”.This complex diplomatic ecology has not only contributed to the development of China and Russia, but also to the development of a new diplomatic environment.This complex diplomatic ecology has brought historic opportunities for Chinese companies in oil and gas development and infrastructure investment, but it has also allowed risks such as tightening of visas and delinquent construction payments to surging.
While France’s influence in Africa is waning, Algeria’s accelerated “new economic model” and “green energy transformation” are opening up strategic channels for Chinese capital.However, the “powder keg” of the Western Sahara sovereignty dispute, the fissure of anti-terrorism cooperation in the Sahel, and the policy fluctuations triggered by the Franco-Algerian conflict are also testing the wisdom of Chinese enterprises to deal with risks.
This article will start from the multi-dimensional profile of the diplomatic situation, decode the crisis and opportunity under Algeria’s “sovereignty first” policy, and provide Chinese enterprises in Algeria with an action guide with both strategic depth and practical value.
News Event 1: Franco-Arab Diplomatic Expulsion War: Colonial Scars Torn Again
In April 2025, relations between France and Algeria reached an icy point when France and Algeria expelled 12 diplomats and recalled their ambassadors over the arrests of diplomats.The trigger was the arrest of Algerian consular officials in the name of “counter-terrorism”, which the Algerian side called “political humiliation”.The conflict is rooted in colonial history: Algeria was ruled by France for 132 years, the 1962 war of independence resulted in a million casualties, and France has in recent years supported Morocco’s claim to Western Sahara, directly touching its diplomatic red lines.
News event II: Sahel drone friction: breaking the regional security chain
In early April, Algeria shot down a Malian drone, accusing it of “violating airspace”, while the Alliance of Sahel States (AES), comprising Mali and other countries, collectively recalled its ambassadors and closed its airspace.Behind the incident is the reorganization of power in the Sahel region: the three AES countries (Mali, Niger, and Burkina Faso) have shifted to military regimes in recent years, and their differences with Algeria over counter-terrorism cooperation have intensified.Algeria, as a regional power, is using military means to strengthen border control, but this may threaten the security of the Chinese-funded Trans-Sahara Gas Pipeline (TSGP) project.
News Event III: Morocco’s diplomatic crisis: Western Sahara as a powder keg
After breaking off diplomatic relations in 2021, the conflict between Algeria and Morocco escalated in 2025.Morocco supports the Kabylia Movement for Self-Determination, an independent organization in Western Sahara, while the Algerian side supports the Frente POLISARIO, an armed force for independence in Western Sahara.The border between the two countries has been closed since 1994, and the recent establishment of diplomatic relations between Morocco and Israel and the recognition by the United States of its sovereignty over Western Sahara have further stimulated hard-line diplomacy on the Arab side.
What happened to Algeria’s foreign policy?
1. Anti-colonial heritage and the primacy of sovereignty
Algeria’s foreign policy has always been shaped by its colonial past and is highly sensitive to former sovereigns such as France.At the core of its diplomacy is “anti-interventionism”, particularly on the question of Western Sahara, where the recognition of Moroccan sovereignty by any country triggers a strong reaction.
2. Struggle for regional dominance
As the largest country in Africa by area, Algeria has tried to expand its influence by supporting counter-terrorism in the Sahel and mediating regional conflicts, but the centrifugal tendencies of the AES countries have thwarted its strategy.At the same time, Algeria has boosted its international voice through energy diplomacy (e.g., gas exports to Europe) to become the third largest supplier of natural gas to the EU by 2023.
3. Great Power Balancing Act
The Arab side seeks a strategic hedge between the U.S., Russia and China:
Risks and opportunities for our business
1. Risk warning: policy volatility and security threats
1.1. Escalation of political risk
The Franco-Algerian conflict may spill over to third-party companies, such as in 2025 when Algeria unilaterally canceled a $3.3 billion deep-water port project with a company, resulting in a disruption of the Chinese logistics layout;
Unrest in the Sahel may threaten the security of the TSGP pipeline and increase security costs for Chinese companies.
1.2 Challenges of the economic environment
Ara’s foreign exchange reserves are tight (about $44 billion in 2023), the risk of project payment delinquency is high, and the payback cycle of Chinese companies’ projects is prolonged;
The dinar continues to depreciate (136 dinars to the dollar in 2023) and exchange losses could erode profits.
Strategic opportunities: energy and diversification cooperation
2.1 Deep binding in the energy sector
Algeria is rich in oil and gas reserves, a chemical, an oil has laid out a number of blocks, the future can expand the development of lithium (accounting for 15% of global reserves);
Borrowing from Arab gas exports to Europe, Chinese companies can participate in the construction of LNG transportation, storage and transportation facilities, such as the Galsi pipeline project with Italy.
2.2 Space for industrial diversification
A government to promote the “new economic model”, focusing on the development of digital economy, automobile manufacturing, Chinese enterprises can export new energy vehicle industry chain technology;
Strong demand for infrastructure: housing shortage reaches 1.2 million units, China-built construction companies can participate in the construction of guaranteed housing.
Can’t we do this?
1. Strengthening risk assessment mechanisms
Introducing a third-party organization to dynamically monitor the political bureau and using insurance to hedge against geopolitical risks;
Avoid the asset-heavy model and move to technical cooperation (e.g. lithium refineries) to reduce capital deposits.
2. Localization and upgrading
The proportion of local employees is over 70%, which eases the public opinion pressure of “foreign capital plundering resources”;
Joint ventures with Arab state-owned enterprises (e.g., a certain chemical with Sonatrach) to share policy dividends.
3. Taking advantage of the great power game window
With France’s non-influence in decline, Chinese companies can take over former French-funded projects (such as the supporting infrastructure at the Tindouf military base);
After the Russian-Ukrainian conflict, Europe’s energy demand is surging, and Chinese enterprises can join hands with the Arab side to build a “Mediterranean-European” green energy corridor.
Algeria’s diplomatic turmoil not only epitomizes the reconfiguration of power in North Africa, but also provides a testing ground for Chinese companies to “seek opportunities amidst danger”.
Only by accurately grasping the duality of its “historical baggage and great power ambition” can we make a move in the game of chess on the African continent without regret.
