China, Africa Eye Closer Economic Ties

19/04/2005

As Asian and African leaders are due to meet at this week's summit in Indonesia. China, the world's fastest growing economy, and Africa are looking forward to closer economic ties and a concrete cooperation mechanism.

Fifty years after the first Bandung meeting, which marked the beginning of China-Africa cooperation, the fast-growing economic ties between China and Africa have greatly enhanced their relations and are set to shape their future exchanges, both government to government and people to people.

"Kenyans didn't know much about China, until we began operating flight to Hong Kong and Bangkok," Vincent Ongas, who supervises flights of Kenyan Airways to Asian cities, told Xinhua in a recentinterview.

The rationale is simple. Despite many high-level Africa-China exchanges, China means only Kongfu stars such as Bruce Lee and Jacky Chan to ordinary Kenyan people, until Chinese goods, tourists, and business partners become part of their life.

Ongas knows more about China than most Africans. A former foreign student in China, the agriculture graduate lived in China for about five years in the late 1980s and early 1990s, and also worked for a Chinese company in Kenya before he got his present job.

"Studying Chinese is a great choice," Ongas said. Serving as secretary general of an alumni association for Kenyans who studied in China, Ongas was quite aware of the opportunities for Kenyans who can communicate with Chinese businessmen.

Ongas said few of his friends who studied in China are still doing what they were expected to do. One of his friends, a China-trained computer engineer, just quit his government job and started a travel agency to cater to Chinese tourists.

The trend was stimulated by the greatly expanded China-Africa economic links.

According to official statistics, trade between China and Africa has witnessed a phenomenal growth, with direct trade rocketing from over 10 million US dollars in the 1950s to 1 billion dollars 30 years later.

After China's introduction of economic reforms and opening up in the late 1970s, bilateral trade grew much faster. By 2000, it grew to 10 billion. In the new century, under the framework of China-African Cooperation Forum, it took only four years for the bilateral trade to reach 30 billion dollars.

Chinese exports to Africa have expanded from traditional garments, textile and bags to machinery and high-tech products. Inimport, oil, iron ore, cotton, diamonds, logs, tobacco and other raw materials make up about 85 percent of China's imports from Africa.

Both the Chinese and African governments are keen to see an increase in trade and have been making efforts to improve investment environment for each other.

Chinese Premier Wen Jiabao in 2003 announced a tariff exemption policy for certain goods from 25 least developed African states, starting from 2005. Among the 190 items which benefit from the taxexemption, jewelry, which was subjected to as high as 35 percent tariff, is the biggest winner.

Wu Bangguo, chairman of the Standing Committee of the National People's Congress of China, said during his visit to Nigeria in 2004 that enterprises are playing a major role in trade and investment between China and Africa.

In recent years, more Chinese companies are investing in Africa,from the traditional housing, road construction to petrol-chemical, communications, environment and mining. Some high-tech companies, especially those specialize in communications and software, are also entering the continent.

Apart from Huawei and ZTE, other Chinese companies in the high-tech business have entered Africa, and among them is China Aerospace Science and Technology Corp. which announced this month it will sell a communications satellite to Nigeria.

With expanding trade, investment and high-tech cooperation, the growing economic ties between China and Africa have greatly boosted bilateral relations, as shown by increasingly frequent high-level exchanges.

Nigerian President Olusegun Obasanjo pledged to further enhance cooperation with China. "It is by no means to over-emphasize the importance of the need to consolidate and push forward the cooperation between the two countries," he said.

Martyn Davies, director for research & strategy at business consulting group Emerging Market Focus in South Africa, said the dynamic economies in China and India, rather than western-style economies, provide a good example for African countries to follow.

As Chinese and African leaders eye further cooperation, economic ties between China and Africa are set to shape their future exchanges and create a win-win situation and a model for South-South cooperation, analysts said.