Progress in China -Africa trade and economic co-operations

The Chinese government has consistently advocated developing friendly and cooperative relations with African countries on a footing of equality, mutual benefit, efficiency, diversity and common development. China and Africa are economically complementary, which promises great potential for cooperation. Especially in recent years, thanks to the Forum on China-Africa Cooperation, the China-Africa trade and economic co-operations have witnessed steadily expanded areas, growing frequency and continuously upgraded level, therefore Africa has become a very important partner of China. I. The Co-operation Mechanism is being gradually perfected. At present, China has trade contacts with all the 53 countries of Africa. Among the 49 African countries which have maintaining diplomatic ties with China, China has concluded “Trade Agreement” with 45 countries, signed “Investment Protection Agreement” with 31 countries, made “Agreement on Avoidance of Double Taxation” with 10 countries, and established “Economic and Trade Joint Committee Mechanism between Governments” with 42 countries. In order to further consolidate and develop the traditional friendly and cooperative relations between China and Africa, the two sides co-founded the Forum on China-Africa Cooperation (FOCAC) in 2000, which has become an effective mechanism of group dialogues and an important platform to deepen concrete collaboration between China and African countries, and played an important role in guiding the bilateral relations. The Beijing Summit of FOCAC held in Nov. 2006 opened a new chapter in the history of Sino-African relations, a new-type Sino-African strategic partnership featuring political equality and mutual trust, economic win-win cooperation and cultural exchanges has been established by the two sides. Chinese President Hu Jintao declared the 8 policy measures of cementing pragmatic cooperation and supporting African development, which was warmly welcomed by the African countries. II. Rapid growth of Sino-African Trade The trade volume between China and Africa broke 10 billion US dollars in the year 2000, and maintained an annual average growth of 33.5% since then. In 2008, the volume of bilateral trade reached 106.8 billion US dollars, fulfilled the target of “raising Sino-African trade to US$100 billion by 2010” unveiled by President Hu Jintao at the Beijing Summit of FOCAC two years ahead of schedule. In the first half of the year 2009, affected by the global financial crisis, the trade volume between China and Africa was 37.1 billion US dollars, falling back over the same period of the previous year. Chinese commodities are affordable but of good quality, which could meet the needs of the African market and are widely loved by African people. Meanwhile, by affording duty exemption for some African exports to China, by organizing African commodity fairs and by sending purchasing missions to Africa, China is opening up more to Africa and promoting healthy and sustainable development of bilateral trade. According to the statistics of the Chinese Customs, from 1st Jan, 2005 when China carried out the zero-tariff treatment to African commodities to the end of June, 2009, China’s cumulative imports of African favored commodities worth 890 million US Dollars, 478 taxable items of 31 countries are involved. Now, Chinese consumers are already familiar with the red wine from South Africa, olive oil from Tunisia, coffee from Uganda, cassava from Nigeria, sesame from Ethiopia, etc. III. Chinese investment to Africa realized leaping developmentWith the rapid development of the China’s economy and the gradual improvement of Africa’s investment environment, Chinese investment to Africa has been increasing steadily. Since the Beijing Summit of FOCAC, China has supported and encouraged its enterprises to expand investment in Africa by measures such as establishing of China-Africa Develop Fund and building of trade and economic cooperation zones in Africa, thus Chinese investment to Africa realized leaping development. According to the statistics of the Chinese government, Chinese direct investment to Africa was amounted to 7.8 billion US Dollars at the end of 2008. This year, against the backdrop of the deepening global financial crisis and sliding global foreign direct investment, Chinese enterprises have made more, not less, investment in Africa. In the first half of this year, China’s direct investment in Africa amounted to 552 million USD, an increase of 81%. China has established about 1600 corporations in Africa, which cover various field such as agriculture, telecom, energy, manufacturing and processing, catering and so on. China-Zambia Friendship Farm, Hisense South Africa Co., Xinda Aquatic Product Company in Mozambique, Suez Economic and Trade Cooperation Zone of Egypt, Sanli Wood Company of Gabon, Tongmei Pharmaceutical Factory in Togo and other corporations have been settled down in African land. Chinese enterprises’ investment to Africa has promoted the export of Chinese products and equipments, extended their development space and realized favorable development. Meanwhile, Chinese investors have taken practical technology and management experience to African countries, increased local revenue, created more jobs, developed human resources, and supported the economic development of these countries. IV. Fruitful Cooperation in the Field of Infrastructure In order to help African countries to improve their independent develop capacity, the Chinese government has granted substantial aid and concessional loan to African countries. Chinese financial agencies have also provided various commercial loans to African countries on the basis of mutual benefit and win-win result, so as to relieve the Capital bottle neck of African countries and support their infrastructure construction. Chinese enterprises drawn upon their mature technology and management experience, have been actively involved in the construction of the infrastructure projects of African countries. Today, Africa has become China’s second largest engineering contracting market. Projects contracting business with African countries account for 35% of the global market business, mainly distributed in Algeria, Sudan, Nigeria, Angola, Ethiopia, Equatorial Guinea etc, involving areas such as building, communication and IT. Projects implemented by Chinese enterprises in Africa such as East-West Expressway project in Algeria, Lobito dock Project in Angola, Bui Hydroelectric Project in Ghana, Railway Project in Libya win the recognition of the local government and the proprietor by their good quality and fast construction speed. Some of these projects were honored as “China Standard” and “China Speed” by the African people. For example, the Kenya No 109 national highway constructed by China Road and Bridge Corporation is called “China Road” by the government and people because its good quality and high standard. The implementation of these projects, on one hand have helped African countries improved their capacity of independent development and poverty elimination, realized economic and social all-around development, on the other hand have promoted the economic and trade relations between China and Africa, strengthened the traditional friendship between the two peoples. V. Remarkable achievements have been achieved in aid to AfricaChina has a population of 1.3 billion. The per-capita GDP level here is still very low. Nearly 200 million Chinese people are still living below the World Bank standard of 1.25 USD per day per person. China faces a daunting task of development and tremendous pressure for poverty reduction. Regardless, since its founding, the People’s Republic of China has consistently provided aid for Africa to the best of its ability. China’s aid to Africa is part of South-South Cooperation, with full respect to the wishes of the recipient countries, sincerely help recipient countries to realize economic development, without any additional political conditions, neither interfere the internal affairs of recipient countries nor damage the interests of the third country. So far, China has aided over 50 African nations in over 900 construction projects, covering various areas such as livestock and fishery, agriculture, light and textile industries, water conservancy, electric power, communication, traffic and food processing. A number of Projects, such as the sugar factory in Togo, COMATEX S.A in Mali, the Friendship Port in Mauritania and Canal Project in Tunis, which have been playing an important role in economic and social development of the recipient countries. The Chinese Government has trained 30,000 African people of various professions, sent 350,000 specialists to Africa and written off partial government debts owed by 33 African countries. Since the dispatch of the first medical team in 1963, China has sent medical workers of over 17,000 person times to Africa. The global financial crisis has a profound influence to developing countries including China and African countries. Since the economic foundation of Africa is comparatively weak, it has been severely impacted by the crisis. China made a lot of appeals in various occasions to the international society, such as not to ignore development problem while dealing with the financial crisis, not to evade the commitment of aid to Africa on the ground of the financial crisis, continue to promote the implementation of the United Nations’ Millennium Development Goals, and give special consideration to the interests of African countries and least developed countries. In February 2009, during his visit to Africa, Chinese President Hu Jintao said, although China is faced with difficulties itself, Chinese government will conscientiously implement all policy measures of cementing pragmatic cooperation and supporting African development declared at Beijing Summit of FOCAC, continue to provide more development aid and cancel debt for African countries to the best of its ability, expand trade and investment to Africa, strengthen practical cooperation with Africa. President Hu Jintao underlined that amid a crisis, China and Africa should support each other and join hands to pass the difficult time together. China would like to work together with African countries, on the basis of “equality, mutual benefit, efficiency, diversity and common development”, share development opportunities, face challenges together, adopt effective measures to further promote the all-around development of Sino-African cooperation on a larger scale, in more areas and at a higher level. Mr Wang Qin, is the Economic and Commercial Counsellor of the Chinese Embassy.