2010-06-22
Source: Chinadaily.com
Against the backdrop of China-Africa friendly cooperation, China's assistance to African countries totaled RMB 76 billion by September 2009, and issued RMB 46 billion of loans by 2008. China has assisted African countries to complete over 900 projects including textile factories, hydro power plants, stadiums, hospitals and schools, half of which being related to local people's wellbeing.
When Western countries focus on "capacity building" and other "software projects", China pays more attention to investing in "hardware projects" such as roads, bridges, and other infrastructure, which deliver tangible benefits to the locals. The Export-Import Bank of China (China Eximbank), founded in 1994, plays an important role in offering loan support to these infrastructure projects. By September 2006, the China Eximbank had supported 259 projects in 36 African countries, 79% of which are infrastructure projects, including the Benguela Railway of Angola, Merowe Dam of Sudan, and the thermal power plant of Nigeria.
In the 21st century, under the framework of FOCAC (Forum on China-Africa Cooperation), China-Africa cooperation is expanding to multiple fields of trade, investment, technological cooperation, improving living standard, infrastructure construction, and areas of capacity building. China-Africa trade has risen from US $10.6 billion in 2000 to US $91.08 billion in 2009, registering an average annual growth rate of 27%, of which the annual growth of China's export is 28.4%, and import 25.64%. China has become Africa's second biggest trading partner. The share of China-Africa trade has increased from 2% to 4% of China's total foreign trade volume, and jumped from 4% to 10% of Africa's foreign trade.
The global financial crisis led to a plummet of the bulk commodities in the international market in 2009, also posing a negative impact on China-Africa trade. In spite of this, China's import of zero-tariff goods from Africa reached US $2.13 billion in the year, up by 80.3%. The fastest-growing items include textile materials and products, metallic products and agricultural products, the import volume of which were US $530 million, US $5.2 billion, and US $660 million respectively (up by 12.3%, 20.2%, and 32.8%). Such a high growth eased the difficulties for African export caused by the shrinking of European and American markets due to the financial crisis. At the same time, the export of China's traditionally competitive and low-price products, i.e. daily necessities for African consumers such as shoes and agricultural products saw a positive growth in Africa. The export of shoes stood at US $1.43 billion, up by 11.4%; while that of agricultural products was US $1.58 billion, up by 1.8%.
With the establishment of China-Africa economic and trade cooperation zones, Chinese firms' investment in Africa has also increased dramatically. In 2009, China's non-financial direct investment to Africa was US $1.36 billion, increasing by 36.8% over that of the previous year and making up 3.8% of China's overseas direct investment. Africa has grown into one of the fastest rising destinations for China's overseas direct investment. At the same time, Africa's investment in China is also growing gradually. Up till now, the total investment of African countries in China has reached nearly US $10 billion, covering over 4000 projects, many of which have drawn more investments thanks to their good returns. In 2009, among the four African countries whose investment to China exceeded $10m, except for Mauritius, the other three, namely Seychelles, South Africa, and Egypt all increased their investment in China, of which South Africa's investment in China was more than US $40 million, up by over 60%.
The recent years have also seen growing Chinese assistance to Africa, including the debt relief and sending of young volunteers, and more aid in areas of poverty alleviation, health care, education, infrastructure, people's wellbeing, and capacity building. Agriculture, finance, tourism, aviation, and environmental protection have become the new points of growth in China-Africa cooperation.
Basing on the needs of African countries and bringing into full play its advantages in agricultural technology, human and financial resources in the field of agriculture, China has helped African countries accelerate agricultural development, and achieve the basic goal of self-sufficiency in food and poverty alleviation by transferring advanced managerial expertise and applicable technologies. By the end of 2009, China has launched altogether 14 agricultural technology demonstration centers, sent senior experts on agricultural technology to over 30 African countries, provided free food assistance to some African countries, and developed over 140 agricultural projects including agricultural technology experiment centers, agricultural technology application centers, and farms, all of which have helped promote local agricultural development and eased the food shortage. For instance, the rice production demonstration project in Guinea- Bissau and rice–growing technology application project in Sierra Leone have played an important role in local development.
On the financial front, the China Development Bank (CDB), Industrial and Commercial Bank of China (ICBC), China EXIMbank, and Bank of China (BOC) have entered the African market. By 2009, the products and services of Chinese financial institutions have reached more than 50 African countries, and over 40 African countries have benefited from China's government preferential loans. At the same time, six banks from five African countries including Morocco, Cameroon, South Africa, Egypt, and Nigeria have set up their branches or representative offices in China.
About China-Africa cooperation in tourism, by 2009, a total of 28 countries and regions in Africa have been granted Approved Destination Status (ADS) by China. Although the proportion of Chinese visiting Africa is not extremely high in the total outbound tourists, the figure is growing rapidly. In 2009, 381,600 Chinese mainlanders visited Africa, up by 18.5% over 2008. The most popular destinations are Angola, South Africa, Egypt, Kenya, and Mauritius. With the application of information technology in Africa and the improvement of tourist infrastructure, China-Africa tourism cooperation will have a brighter future.
Air transportation is an important channel for China-Africa business cooperation. By the end of 2009, China has signed or initialed inter-government air transport agreements with 20 African countries. At present, the airlines of Egypt, Ethiopia, Zimbabwe, Kenya, and Algeria have opened direct flights to Beijing and Guangzhou, and the China Southern Airline and Hainan Airline have opened direct flights from Beijing to Lagos, Luanda, and Khartoum. There are already 34 regular flights between China and Africa every week.
In terms of China-Africa cooperation in environmental protection, in recent years, China has carried out effective cooperation in the field with African countries through bilateral and multilateral platforms, having exerted utmost efforts to safeguard the interests of developing countries and promoting smooth international cooperation on environmental protection. On the international environmental protection conferences held by the UN recently, China and Africa coordinated their positions, and actively explored new ways to address the environmental problem for developing countries. At the same time, under the framework of FOCAC, the two sides have also held the China-Africa Meeting on Environmental Protection, and implemented the China-Africa Cooperation in Human Resources Training for Environment Programme, and set up a UNEP China-Africa Environmental Center, having made progress in areas of expanding environmental exchanges, promoting environmental protection technology cooperation, and strengthening environmental protection personnel training.
China-Africa economic and trade cooperation is constantly pushing forward Africa's economic development, which is reflected in the following:
Firstly, the construction of infrastructure projects such as hydro power plants, transport and communication facilities has promoted Africa's economic development. Over the years, through assistance, project contracting, and investment cooperation, China has helped African countries to build roads, bridges, schools, and hospitals, and has thus improved the local production and living conditions. In recent years, based on the needs of African countries for better information technology, economic development and public wellbeing, China has increased its investment in power and water supply, and information network construction in African countries. For example, the Chalinze water supply project in Tanzania covers 18 villages and benefits nearly 100,000 people, having basically addressed the problem of the local residents' daily needs for water. (In 2009, the Chinese government agreed to maintain and expand this project, which will benefit another 32,000 people on completion.) In 2009, China handed over the e-government network to Senegal, which covers national government agencies, administrative institutions, schools, and hospitals, that has greatly improved the efficiency of the agencies. The construction of the national trunk optical cable transmission network of Tanzania, which started in July 2009, will not only link up the major provinces and districts of Tanzania, but also connect up with its six neighbouring countries, and hook up with the Seacom cable of South Africa through Ebase of East Africa. Once completed, the project will provide fixed telephone, mobile communication, international internet, and value-added information services, and make Tanzania a telecommunication hub of East Africa.
Secondly, China-Africa cooperation has boosted Africa's capability of industrial development. Chinese investors in Africa pay high attention to creating job opportunities for local countries and improving local industrial development capability. For instance, the establishment of the Egyptian Shareholding Co. Ltd. puts an end to Egypt's history of having no bag manufacturers. 20% of the bags produced by the company are sold to the local market, and the rest exported to Morocco and Algeria. In 2004, Yuemei Group, a Chinese private textile enterprise, set up a plant in Nigeria and since its completion, it has greatly promoted the development of the local textile industry. With so many business orders, that the company has to outsource to the local rural population that have thus added over 4000 weaving machines and generated an extra income of RMB 40 million yuan. At the same time, the firm has also promoted the development of related sectors such as cotton trading, dyeing, and warehousing. The construction of Yuemei-Nigeria textile industrial park started in 2008 and it is the first overseas endeavor by a private Chinese enterprise. It plans to introduce 15 to 17 up-and-downstream enterprises and is expected to create over 10,000 jobs for Nigeria. The completion of the first phase of the project in 2009 has seen five textile enterprises moving in that have contributed over 1000 jobs to the local people. In the meanwhile of conducting economic and trade activities in Africa, the Chinese enterprises have gathered experiences in, improved capabilities of and cultivated a large number of professionals in international operation.
Thirdly, China has helped to accelerate the development of African human resources. In recent years, the Chinese government has set up an African Human Resources Development Fund. By offering government scholarships to students, building laboratories and schools, sending teachers and volunteers, and developing Chinese language teaching facilities, China has helped develop education and human resources in African countries.
The Chinese enterprises have also paid high attention to training local employees. At present, Chinese investment companies in Algeria have offered training to 5000 people from various sectors. Huawei, a Chinese telecommunication company, has set up two R&D centers and six training centers in Africa, and over 60% of its employees in African countries are local. After training, over 12,000 students from various African countries have become the mainstay of the local telecom sector.
With the implementation of the eight new measures committed by China on the fourth FOCAC meeting, special credits for African SMEs development, China-Africa Fund, and China-Africa Joint Research and Exchange Programme, China-Africa cooperation will deliver more tangible benefits to the African people.
Author: Wang Wei, China Institute of International Studies
Editor: Chen Lu
Note: This article only represents the author's personal point of view.
