Li Jinzao, Co-Chairman of the Chinese Follow-up Committee of FOCAC and Vice Minister of Commerce of China, answers questions on China-Africa Cooperation.
I. At the Fourth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in 2009, the Chinese government announced eight new measures (the “New Eight”) to support the development of Africa in the coming three years. How do you evaluate the implementation and effects of these measures?
Six measures of the “New Eight” are about economic cooperation and trade under, covering a dozen of 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 USD 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 livelihood and development conditions for Africa, enhancing the continent’s capacity for “blood generation”. Take Uganda as an example. The Chinese technical team taught over 3000 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.
II. While China-Africa trade is growing rapidly, African countries express their complaint about the quality of Chinese products and their expectation on a greater access to the Chinese market. What is your opinion?
In 2011, China-Africa trade hit USD166.3 billion, a year-on-year growth of 31% or 16 times that in 2000. China’s imports reached USD 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, to which the Chinese government attaches great importance. In 2010, the Ministry of Commerce and other 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.
III. What are the features of China-Africa investment cooperation? Some say that Chinese investors come to Africa for resources. What’s your view on this?
Rapid growth of 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 USD2.1 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 energy and mining sector 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, private sector is becoming a new force for investment in Africa. In some African countries, over 50% of Chinese investors are private companies.
It is worth mentioning that when they invest in Africa, Chinese companies always observe international practices and market rules and participate in international competition and cooperation in a normal way. China-Africa investment cooperation is comprehensive and diverse, not limited to certain countries or specific sectors. 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.
IV. China’s per capita GDP still ranks around 100th in the world, what is the reason for China to have been expanding the scale of its aid to Africa in recent years?
China has provided some economic assistance to African countries for projects related to people’s livelihood, human resource training and supply of goods and materials. The above-mentioned assistance was made to the best of China’s capabilities and represented a rather small share of its GDP, which was well affordable for a developing country.
Development assistance is an important way for countries to give mutual support and achieve common development. It includes assistance of developed countries to developing countries and mutual assistance between developing countries. China’s aggregate economy jumped to No. 2 in the world from relatively backward conditions, and this achievement is inseparable from the support and help of many countries including African ones. In the wake of the Wenchuan earthquake in 2008, some African countries which don’t have much financial resources generously offered their assistance to China. Therefore, we will lend a helping hand to Africa within our capacity when we realize our own development. This manifests the traditional China-Africa friendship and the international morality and responsibilities and also contributes to a good environment for global development.
V. How do you view the future of China-Africa trade and economic cooperation? Has China developed new ideas and measures to support Africa’s development?
At present, China-Africa trade and economic relations have embarked on a new development phase, which calls for better-quality and higher-level cooperation that meets our respective development needs. We aim to maintain the scale and speed of our cooperation, expand cooperation into more areas, and avoid short-sighted actions and make good long-term plans for a mutually beneficial and win-win cooperation as well as common development.
To this end, we will continue taking strong measures to support Africa’s development. Specifically, we will continue our assistance to African countries with a focus on helping them improve people’s welfare; we will expand two-way investment and financing cooperation, and encourage and support Chinese companies to invest in African manufacturing and services sectors in a bid to improve African countries’ capability of independent development; and we will explore various cooperation approaches and financing instruments to support African countries in improving infrastructure conditions, and contribute to Africa’s regional integration process.
Courtesy: Embassy of the Peoples Republic of China.