(The author, Chen Deming, is the Minister of Commerce of the People’s Republic of China and the Honorary Co-Chair of the Chinese Follow-up Committee of FOCAC)
In Malawi, a landlocked African country, rows of cotton cultivated by local farmers with instruction from Chinese experts are budding; in Ethiopia, a shoe factory, which was built with investment from the China-Africa Development Fund, is teeming with local workers; in the Democratic Republic of Congo, a hydropower station, financed by credit from China, has just been inaugurated. In the meantime, in China, a country tens of thousands of miles away, African officials and technicians have been invited to Beijing to share China’s development experience and advanced technology; in Yiwu, a city in Southern China, Chinese customers are selecting South African wine at the Exhibition Center for African Products; at the New Port of Tianjin, a cargo ship loaded with fruit and textile products from Benin is preparing for tariff exemption procedures to enter the Chinese market.
These are the encouraging scenes unfolding before us as China fulfills its commitments on economic cooperation and trade announced at the Fourth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in 2009. At the meeting, which was held amidst the rampaging financial crisis, the Chinese government announced eight new measures to advance its practical cooperation with Africa, including development assistance, credit and financing, training and trade promotion. This speaks volume of the determination of China and Africa to weather the challenging times hand in hand. Steered by FOCAC and stimulated by these promotion measures, the two sides have withstood the test of the financial crisis. As a result, the trade and economic cooperation has witnessed faster growth across wider areas in more diversified forms, bringing more tangible benefits to the Chinese and African people.
In terms of trade, the total trade volume between China and Africa hit a record high of USD 166.3 billion in 2011, growing by 83% from the year 2009. China stands as the unchallenged largest trading partner of Africa. On the back of robust trade, Chinese goods, in greater quantity and with better quality, are welcomed by African people; more and more African specialty goods have been made available to Chinese consumers. Resource commodities from Africa have secured a stable market and higher prices.
With respect to investment, China’s direct investment in Africa had reached USD 14.7 billion by the end of 2011, up 60% from 2009. While the number of investment projects in energy, mining, construction and manufacturing keeps growing, collaboration on finance, aviation, agriculture and tourism has also boomed. More than 2000 Chinese firms have invested in Africa. In the process, they have not only helped diversify the African economy, and contributed to local tax revenue and job creation, but also found a promising land for their overseas expansion.
In the area of project contracting, Africa has become China’s second largest overseas market. In 2011, the business turnover of Chinese contractors in Africa grew by 28% in 2009 to USD 36.1 billion, accounting for 30% of China’s total turnover in overseas markets. The inflow of capital, equipment and technology from China has helped cut cost and steadily improve infrastructure in African countries.
In terms of development assistance, China increased its aid to Africa by over 60% from 2009 to 2011. China built a large number of welfare projects, including schools, water supply and clean energy projects, and trained more than 20,000 personnel in various fields for Africa over the three year period. These programs, tailor-made to meet the needs of African countries, focus on enhancing the welfare of the local people. They are promptly implemented without any political strings attached, contributing to the realization of the Millennium Development Goals in Africa. They are testimony to the friendship between the Chinese and African people.
In the second decade of the 21st century, trade and economic cooperation between China and Africa, while keeping a momentum of robust growth, finds itself standing at a new starting point. Against the backdrop of sluggish world economic recovery and difficulties in reshaping the global economic governance regime, China and Africa face unprecedented challenges in their next step of development. Due to structural imbalances, the complementarity in China-Africa economic cooperation and trade has yet to be realized and much potential left to be further tapped into.
Nevertheless, as developing countries, China and African countries have all managed to keep relatively fast economic growth and enjoyed good prospects. Adequate capital, a strong industrial basis, and sophisticated technologies and equipment of China can be seamlessly matched with Africa’s advantages in resources, markets and labor costs. As China and Africa both need to restructure our economies and transform our growth patterns, there is a pressing need and great potential for the two sides to collaborate on industrial relocation. Africa’s economic integration initiative creates even more opportunities for cooperation with China on a larger scale and at a higher level. In the reform of the global economic governance system, both sides are committed to the principle of active engagement, cooperation and solidarity. China and Africa are spotting new and greater opportunities in our economic cooperation.
The upcoming Fifth Ministerial Conference of the FOCAC will surely usher in a new era of China-Africa trade and economic cooperation. China will adhere to the philosophy and principle of “equality and mutual benefit, cooperation and win-win, and common development”, restructure and upgrade bilateral trade and economic cooperation, strengthen the bond and broaden the basis of shared interests with Africa to solve the “growing pains”. The two sides will work together to tackle external challenges and inject new vitality to the intensified South-South cooperation.
–Reinvent ways of cooperation to enhance the role of Chinese and African economies in the global value and industrial chain. We will continue to expand investment cooperation with Africa, and migrate to Africa industrial chains with which China enjoys a comparative edge, so as to extend the value-added chain for “Made in Africa” products and create more job opportunities for African people. We will deepen cooperation with Africa on infrastructure development to cover pre- and post-construction stages from planning and design to operation and management. With these efforts, we seek to upgrade our bilateral cooperation in quality and efficiency, turn Africa’s potential into development strengths, and share the benefits of the relocation of the global industrial chain.
–Expand scope of cooperation to locate new areas of growth for all-round China-Africa cooperation. We support the two sides to strengthen cooperation on deep resource processing, agricultural development and manufacturing, and explore opportunities for cooperation in finance, commerce, logistics and aviation to create synergy in a wide range of industries. We will actively engage with Africa in its integration initiative by encouraging competent Chinese companies and financial institutions to participate in cross boarder and inter-regional infrastructure projects in Africa, enhance exchange and cooperation between the two sides on regional trade facilitation in Africa, and gradually establish a comprehensive, diversified and multi-layered China-Africa trade and economic cooperation system.
—Focus on improving people’s welfare, and support African countries’ efforts in achieving the Millennium Development Goals. China will remain committed to deepening South-South cooperation, and continue to provide aid to African countries to the best of our capabilities, with a focus on areas that most affect people’s welfare such as the introduction and use of agricultural technologies, healthcare and drinking water. We will also provide more support in such fields as human resources development, vocational training and environmental protection. These efforts are aimed at helping African countries improve their development capabilities and enable African people to benefit more from China’s development assistance to Africa.
— Foster a sound environment and facilitate cooperation between more Chinese and African businesses. We will work to see more investment protection agreements and double taxation avoidance agreements signed and have the existing ones well implemented, and enhance cooperation on consular protection. We will promote more experience and knowledge sharing with our African counterparts in areas including development concept, policies, laws and regulations, and industrial park development. We will encourage companies to fulfill their social responsibilities and pay greater attention to environmental protection and project sustainability. The function of the China-Africa Business Conference and the chambers of commerce of both China and African countries will be fully utilized to provide trade and investment promotion services. We will create a fair, transparent, safe and convenient business and investment environment for Chinese and African companies.
— Support African countries’ positions and safeguard the common interests of developing countries. We will further strengthen coordination with African countries in promoting the establishment of an open and free global trading system. We support African countries’ positions in the Doha Round of negotiations to protect their own interests. We will work together with African countries so that the Doha Round can achieve substantive results in areas of the greatest concern to developing countries, especially least developed countries, and realize early harvest.
Twelve years ago, China and African countries launched together the Forum on China-Africa Cooperation, which unveiled a brand new page in China-Africa trade and economic cooperation. Today, twelve years later, China will continue working with African countries to consolidate the Forum’s achievements, seize development opportunities, identify breakthrough points for mutually beneficial and win-win cooperation, promote the comprehensive, coordinated and sustainable development of China-Africa trade and economic cooperation, further substantiate the new type of China-Africa strategic partnership, and contribute to the economic development of both China and African countries as well as global economic recovery.
Source: Ministry of Commerce Website; http://english.mofcom.gov.cn/aarticle/newsrelease/significantnews/201207/20120708248566.html