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New Business Trends  Eastern Trade
Africa ‘to learn from China’
Africa is increasingly turning not only to the west but also to China for financing to help its economic development, and as a role model in combating poverty.
Trade links between China and Africa have increased since 2004, when President Hu Jintao announced a drive to strengthen relations with the continent.
“Clearly we all have a lot to learn from China,” Liberian Finance Minister Antoinette Sayeh said at a news conference in Washington on Saturday. “China has made more progress than anywhere in the past few decades in combating poverty.”
Some western observers are wary of China’s growing role in Africa, which they say helps support dubious governments, and also risks plunging some African countries into another vicious circle of indebtedness.
But African states are embracing China with open arms, and international lenders such as the World Bank are talking with the Chinese about working together in Africa.
“Ghana, Uganda, Mozambique, Tanzania — these are countries that have pretty good economic management, and in those the World Bank is interested in working with Chinese partners,” said David Dollar, World Bank China country director.
Dollar said the World Bank was interested in working with the Export-Import Bank of China in some African countries to help finance infrastructure projects such as the construction of roads and power plants.
China’s economy has grown at a yearly rate of almost 10% over the past three decades and is heavily reliant on imported natural resources to support growth in its manufacturing sector.
China’s top offshore oil producer, CNOOC, last year paid $2,3bn for a stake in a Nigerian oil and gas field. Africa supplies China with about a third of its crude oil needs.
China said in January it would lend Africa $3bn in preferential credit over three years and double its aid and interest-free loans.
There are signs there is more to come.
Over the next three to four years, Zambia expected Chinese firms to invest $800m in a new economic development zone near a Chinese-run copper mine, said Zambian Finance Minister Ng’andu Magande on Saturday.
The zone would include facilities for copper processing and the production of cables for export to China and other markets, including the US, he said.
But not all African countries are rushing to take on more debt.
Liberia, for example, is still struggling with about $3,7bn in foreign debt. But China could play a key role in financing large-scale Liberian infrastructure projects in the future, Sayeh said.
Last year, trade between China and Africa reached $55,5bn, a 40% leap on 2005.
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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