What can China bring to Africa?

By Wang Wei
0 CommentsPrint E-mail China.org.cn, July 4, 2010
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China and Africa are seeing increasingly closer ties over the years. By 2008, the loans China provided to Africa totaled 46 billion yuan (US$6.75 billion). By the end of September 2009, the financial aid China provided to Africa totaled 76 billion yuan (US$11.15 billion).

Unlike Western countries, which prefer "soft power-enhancing" projects, China prefers to invest in projects that can bring immediate benefits to local people. Of some 900 projects China built in Africa, more than half are aimed at improving local people's livelihoods. By September 2006, the Export-Import Bank of China had invested in 259 projects in 36 African countries, of which 79 percent were related to infrastructure construction, such as the Benguela railway in Angola, the Merowe Dam in Sudan and the thermal power plants in Nigeria.

Since 2000, thanks to the Forum on China-Africa Cooperation, cooperation between China and Africa has extended to a wider range of areas, such as technological development and independent innovative capacity building.

China has become Africa's second-largest trading partner. From 2000 to 2009, the volume of bilateral trades surged from US$10.6 billion to US$91.1 billion, a 27-percent annual increase. The proportion of Sino-African trade in China's total foreign trade has risen from 2 percent to 4 percent, and the proportion of Sino-African trade in Africa’s total foreign trade has increased from 4 percent to 10 percent.

In 2009, despite the price decline of bulk commodities in the international market, the volume of zero-tariff goods China imported from Africa jumped 80.3 percent to US$2.13 billion. As demand from Europe and the U.S. shrank amid the global financial crisis, this rise greatly lessened the pressure on Africa. China's export volume of daily necessities registered a positive increase. The export of shoes reached US$1.43 billion, up 11.4 percent from 2008.

With the development of trade and economic cooperation zones, African countries have seen more investments from Chinese companies. In past years, China's direct investment in Africa was larger than in anywhere else in the world. In 2009, China’s direct investments in non-financial areas other in Africa rose 36.8 percent from 2008, reaching US$1.36 billion.

African countries are also investing more in China. By now, African countries have invested nearly US$10 billion in some 4,000 projects in China. In 2009, South Africa alone invested more than US$40 million in China, up 60 percent from 2008.

Recently, China greatly enhanced its aid to Africa. In addition to financial supports, it began to cancel African debts and dispatch young volunteers to the continent. Agriculture, finance, tourism, aviation and environment protection have become new contributors to Sino-African economic cooperation. The close relations between China and African countries have exerted a positive effect on African economic development.

First, infrastructure construction in transportation, hydropower and telecommunications has enhanced African economic development. In the past, China had been working hard to improve local living and production conditions by funding, contracting and participating in infrastructure construction. Recently, to satisfy African countries' need in developing its information industry, economy and people's livelihood, China shifted its investment focus to power and water supply and information network construction.

Second, Sino-African cooperation has increase Africa's capacity to develop modern industries. The Egypt Mingzhou Trades Co., Ltd. is the first suitcase and handbag producer in Egypt. About 20 percent of its products are sold in the local market and the rest are exported to Morocco, Algeria and other parts of the world. The Yue Mei (Nigeria) Textile Industry Park, the first private Chinese company established overseas, will be home to 15 to 17 textile enterprises, creating more than 10,000 jobs for Nigerians.

Third, the potentials of local human resources have been greatly tapped. Recently, the Chinese government set up a human resource development fund for African countries. It will offer scholarships to African students, help African countries set up laboratories, fund school construction and dispatch teachers and young volunteers. Chinese companies in Africa also pay great attention to employee training. In Huawei's two R&D centers and six training centers in Africa, more than 60 percent of employees are locals. Some 12,000 trainees have become the backbone of the African telecommunications industry after taking courses in these centers.

With the implementation of new measures pledged in the Fourth Forum on China-Africa Cooperation by China, along with special loans for medium and small African enterprises, the China-Africa Development Fund and the China-Africa Joint Research and Exchange Program, the cooperation between China and Africa will bring even more benefits to Africans.

The author is a researcher of China Institute of International Studies.

(This article is translated by Chen Xia, China.org.cn)


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