The Africa-China Engagement

There has been considerable debate about the merits of China’s engagement in Africa, often with divergent views.  However the practical benefits for Africa are often welcome. 

For instance, according to the Africa Progress Report, recently presented by the Chair of the Africa Progress Panel, Mr Kofi Annan, China’s investment in Africa has doubled in the last decade (see chart) from about US$2billion in 2003 to over US$4billion in 2008. In addition Africa-China trade was estimated at US$6.5billion in 1999 but in 2008 was valued at US$107 billion, making China the second largest single country trading partner following the US. 
However China remains the regions largest source of imports and reportedly over 1600 Chinese companies are in operation in Africa, with the Chinese Government also investing in low cost industrial zones (e,g, Egypt) and in the agricultural sector (e.g. Ethiopia). 


Additionally, China also has targeted practical areas in which to focus its aid to Africa.  At 4th Ministerial Conference of the Forum on China-Africa Cooperation, Chinese Premier Wen Jiabao, announced eight (8) new measures to promote practical cooperation with Africa. The selected economic measures include:  Support to strengthen agricultural exchanges and cooperation in order to help Africa to increase food production capacity and increase the number of agricultural technology demonstration centers built by China in Africa to 20, and send 50 agricultural technology teams to Africa.

China has also pledged support to strengthen cooperation in education and human resources development; to build 50 China-Africa friendship schools; to train 20,000 personnel for Africa, including 1,500 school headmasters and teachers, 2,000 agricultural technology personnel, 3,000 doctors and nurses and to provide 1.5 million U.S. dollars in support of human resources training under New Partnership for Africa's Development (NEPAD).

Additionally, there will be support to strengthen cooperation in clean energy development and utilization, in clean drinking water technologies and to help Africa enhance capacity to adapt to climate change.

China will further advance the sound development of China-Africa trade by phasing in zero-tariff treatment for 95 percent of the products from the Least Developed African countries (LDCs) having diplomatic relations with China. This will starting with 60 percent of the products within 2010. China has also pledged to set up African commodities trade center in China and adopt preferential policies such as fees reduction for participating African enterprises to promote export of African commodities to China. China will also establish three to five logistic centers in Africa and improve business facilities in African countries.

To address the financial crisis, China will provide Africa with 10 billion U.S. dollars in concessional loans, mainly for infrastructure and social development projects.  The government will also support Chinese financial institutions in setting up a 1 billion U.S. dollar special loan to grow African small and medium enterprises.

China will also continue to support poverty reduction efforts and cancel due debts of interest-free government loans that matured by the end of 2009 owed by all heavily-indebted poor countries and the LDCs in Africa having diplomatic relations with China.

Finally, China has promised to further fulfill the pledges made at the Beijing Summit and to increase the size of China-Africa Development Fund to 3 billion U.S. dollars and support Chinese enterprises to expand investment in Africa.

My view is that there is a lot we can learn from China.  For instance on average, China's economy grew 10 percent per year between 1980 and 2008, compared with only three percent in sub-Saharan Africa during the same period. These divergences in economic growth in general, and in agricultural development in particular, have led to noticeably different patterns in poverty reduction in both regions.

According to a study by the International Food Policy Research Institute (IFPRI), between 1980 and 2005, the number of poor people decreased in China by more than four times, from 835 million to 208 million. The researchers found that China's strong initial emphasis on agricultural growth was essential in reducing poverty in that country. Growth in agriculture in China is estimated to have contributed to poverty reduction four times more than growth in manufacturing and services. Meanwhile according to World Bank figures, the role of agriculture in Sub-Saharan Africa has fallen from 19 percent of the gross domestic product (GDP) in 1980 to 14 percent in 2008.