The Key Pillars Of China, Africa Partnership
The Fourth Ministerial Conference of FOCAC in 2009, saw the Chinese government announce eight new measures (the New Eight), to support the development of Africa in the subsequent three years. Of the eight, six of these measures are about economic cooperation and trade, covering a dozen areas. Thanks to the concerted efforts of the two sides, these measures have been implemented effectively over the past two years.
In terms of development assistance, more than 30 agricultural teams have been dispatched and schools are being built and medical supplies delivered as scheduled. With regard to credit and financing, we have signed agreements on loans of a preferential nature with African countries, offering a credit line of US$8 billion.
In terms of trade promotion, we have extended zero-tariff treatment to 60% of imports from Least Developed Countries (LDCs) in Africa with which China has diplomatic relations. It is expected that the implementation of all the promotion measures will be completed by the end of this year as scheduled. These measures have improved livelihoods and development conditions for Africa, enhancing the continent’s capacity.
Take Uganda as an example. The Chinese technical team there taught over 3,000 locals to raise freshwater fish and process fish feeds. Roads in Uganda are repaired and maintained with concessional loans from China to facilitate the movement of people and goods in the country. Thanks to tariff exemption measures, Uganda’s exports to China grew by 32% and 51% respectively in 2010 and 2011, higher than its overall export growth over the same period.
On African countries’ occasional complaints about the quality of Chinese products and their expectation of a greater access to the Chinese market, China-Africa trade hit US$166.3 billion in 2011, a year-on-year growth of 31% or 16 times than in 2000. China’s imports reached US$93.2 billion, up 39% year-on-year. Chinese exports are able to meet demands of African consumers from all walks of life with good quality and fair price.
Nevertheless, we have noticed that there are a handful of people illegally manufacturing and selling counterfeited and shoddy products, which the Chinese Government attach great importance in preventing. In 2010, the Ministry of Commerce and another eight agencies of the Chinese Government conducted a ‘Special Campaign against Exporting Counterfeits and IPR Infringing Goods to Africa’.
As the next step, we will continue to work with Africa to phase in a joint action mechanism combining short-term campaigns with permanent governance to protect the market from cheap shoddy fakes.
While selling goods with better quality to Africa, China has adopted a series of measures to buy more from Africa, such as exempting duty and building African Commodities Exhibition and Distribution Centers. For example, over 20 African business owners have registered and sold African specialties in the Yiwu African Commodities Distribution Center since it opened in 2011.
We will continue to extend Duty-free treatment to cover more products, strengthen cooperation in areas such as Customs clearance and quality inspection and quarantine, and promote balanced and sound development of China-Africa trade. The most salient features of China-Africa investment cooperation reflects complementarity between China and Africa in resources, markets and industrial structure. It shows that cooperation brings mutual benefits and win-win results to economic growth. This cooperation has the following features. First, it grows fast. The value of China’s direct investment in Africa increased by 40 times to US$2.1 billion from 2001 to 2010. Second, it flows into many countries. Chinese investment goes to all African countries.
Investments of over 2,000 Chinese companies flow into 50 African countries, ranging from resource-rich countries like Angola to resource-poor ones like Mali. Third, it covers a wide range of sectors. Only 25% of Chinese investment in Africa goes to the energy and mining sectors, while the remaining 75% goes to sectors such as finance, processing and manufacturing, construction, business services, agriculture and transportation, etc.
Fourth, it involves diverse players. Aside from State-owned enterprises, the private sector is becoming a new force for investment in Africa. In some African countries, over 50% of Chinese investors are private companies”. The Chinese Government has established effective platforms for Chinese companies to invest in Africa, such as the China-Africa Trade and Economic Cooperation Zones.
In the years to come, we will continue to encourage and guide Chinese companies to expand their presence in deep processing of resources and other manufacturing industries, create more jobs for local people, engage in the development of local communities, pay attention to environment protection and integrate with local economy and society to achieve common sustainable development.
Li Jinzao, Co-Chairman of the Chinese Follow-up Committee of the Forum on China-Africa Cooperation (FOCAC) and Vice Minister of Commerce of China