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New Business Trends  Eastern Trade
Africa needs to study the EU-China connection
IT IS increasingly clear that China has become a key factor in the economy of most of sub-Saharan Africa. This is being underlined again and again by events ranging from the China-Africa summit in Beijing late last year to the ongoing number of visits by a variety of Chinese leaders to Africa, and most recently illustrated last May by the African Development Bank holding its first annual meeting outside Africa in Shanghai.
At the same time the European Union (EU) remains a key economic partner for Africa, continuing to be its major trading partner, source of investments and development support, as well as engaging with Africa across a myriad of issues including cultural, medical, environmental and scientific ones.
African business has to take both spheres of relationships into account, but what often escapes some is the relevance of the EU-China relationship for Africa.
This relationship helps to create much of the broader structural detail of the relationships both have with an Africa that is often unable to dictate its own agendas.
The new thrust in EU policy — to strive for increasingly stronger ties with China as a partner of special relevance — is illustrated in the new EU-China Policy Report that the EU Commission presented last October.
That was about a year after it unveiled its new policy to improve the EU relationship with Africa. One presumes that the EU must give increasing attention to how best to balance its African and Chinese interests, but whether Africa gives much thought to such issues from its perspective, is debatable.
The trilateral relationship now being strengthened in various formats between the EU, China and Africa is not new.
Business flow between what is now the EU and Asia is centuries old and has recently re-awakened in new, invigorated forms.
It was because of this trade some five centuries ago, where China and India were always of pivotal importance, that the Europeans explored ways to circumnavigate Africa and colonise the continent. It should be noted that the establishment of a European presence at the Cape was only because of its relevance en route to and from the East.
The countries of Europe traditionally bought products manufactured in the great Chinese workplace and in return sold to the Chinese a variety of goods and services.
Along the way the resources of Africa were increasingly being discovered and exploited by the West, although the Chinese had long ago also become interested in such resources from Africa. However, the supply was always small due to factors that only later included a European presence.
In the new EU-Chinese relationship, the EU, together with north America, is of pivotal importance for China as they buy products manufactured in China, increasingly together with African resources.
Crudely and simply put, a smaller market in the EU or north America for Chinese goods means much less money in Chinese coffers for use in buying African resources and Western services and technologies.
In the improved understanding of the broader global marketplace that African decision makers need, there must be focus on the EU-China interaction and its relationship vis-a-vis Africa, focusing especially on the opportunities it creates and lessons that Africa can learn.
Overlaps between the EU and Chinese interests with an African dimension create new business opportunities for African business that can be useful for all, given the synergies that can often exist between them for win-win situations. Simultaneously, these can also create new dangers for Africa — and those must be monitored.
New business opportunities for Africa on a variety of fronts can mean that SA increasingly remains a primary gateway to the continent. A lack of African understanding and action in this context can help undermine its abilities to use existing opportunities and create new ones.
The Chinese demand for African natural resources is a boon for Africa that must be used for sustainable development across a wide spectrum of sectors in Africa, where the EU remains a major factor and source of diversified funding.
The EU is a useful guarantor for African business stability, especially given the predominance of a relatively limited number of sectors in African-Chinese trade, and the likely damaging effects of too close a relationship with a China that is still finding stability for itself in the global economy.
Recent worldwide fears of recession in the light of possible diminished growth and/or currency revaluation in China, clearly illustrates the dangers for Africa.
The full utilisation of positive effects from the new Chinese business involvement in Africa must take a larger international scenario into account in these and other instances.
Such bodies as the regional economic communities, usually needing more capacity to co-ordinate a variety of factors into improved business opportunities, are among those needing to give more attention to the spin-off from China in Africa.
Africa certainly needs increased mechanisms to influence its relationship with China, but also its interaction vis-a-vis Chinese relationships with other continents and especially the EU, and try to obtain improved business deals.
The scope and importance of the greater EU-China context for African business stresses the need for Africa to find new options in positioning itself in the global community.
‖John Maré is an adviser on international public affairs and diplomacy for multinational companies, governments and global organisations (jhemare@worldonline.co.za).
Source - Business Day
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Jaqueline Martinez
Jaqueline studied Public Relations and Journalism at CPUT between 2001 and 2003. She completed Information Systems and Communication Science 101 at Unisa. She teethed on business journalism as a communication specialist with Old Mutual for several years. Jaqueline travelled to Asia and the US teaching English before returning to South Africa and finding her niche as an online editor and features writer with BizAssist Technologies and SA Guide to Business Opportunities.
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