Tuesday, 26 February 2013 14:09

Newsletter 27

In this newsletter:

  • China and the AUC in Talks to Strengthen Strategic Partnership
  • Zimbabwe and China to Bolster Ties
  • China-Uganda friendship association launched
  • Chinese investor to make security doors in Nairobi

China and the AUC in Talks to Strengthen Strategic Partnership

The African Union Commission (AUC) Chairperson Dr Dlamini Zuma and Chinese Foreign Affairs Minister Mr. Yang Jiechi has met in the Chinese capital city, Beijing, in talks to strengthen the strategic partnership between China and the African Union and to promote bilateral cooperation.

Under FOCAC, China and Africa have had five rounds of strategic dialogue to date and expect the next round to go a long way to further strengthen the relationship, said Mr Jiechi.

Dr Dlamini Zuma on the other hand expressed appreciation for the long standing relationship between Africa and China. She also highlighted the importance to Africa, of the celebration of the 50th anniversary of the formation of the Organization of African Union in May this year, adding that it would be an opportunity to review the past fifty years, as well as to plan ahead for the next 50.

Africa and China have been in dialogue since 2000 when the Forum for China Africa Cooperation (FOCAC) was launched. The Forum was established as a platform for collective consultation and dialogue and as a cooperation mechanism among developing countries.

Since the formation of FOCAC, political exchange between Africa and China has been strengthened. There has been growth in the business and trade between the two sides and a deepening of cooperation in development areas. Currently, China is one of Africa's most important trade and economic partners. Figures estimate that in 2012, trade between the two reached USD166.3 billion. Cooperation has also been extended to areas such as infrastructure, climate change, technology transfer, trade finance, agriculture, health, education and cultural exchanges.

The Chairperson is accompanied on her visit by the AUC's Commissioner for Economic Affairs Dr Maxwell Mkwezalamba, the Commissioner of Infrastructure and Energy Dr Mrs. Elham Mahmoud Ibrahim, as well as Senior Officials from the Commission.


Zimbabwe and China to Bolster Ties

While China has several investments in various sectors of Zimbabwe's economy there has been a general feeling in some quarters that the Asian country has not invested enough to match the level of cordial political relations with Zimbabwe.

But the economic relations are set to scale new heights following the visit to Zimbabwe by Chinese Minister of Commerce Mr Chen Deming last week.

After holding fruitful discussions with Finance Minister Tendai Biti, Mr Chen pledged his country's commitment to invest in the infrastructure sector, the axis for sustainable economic growth and development.

The world's most populous nation has the financial wherewithal to help Zimbabwe address its massive infrastructure problems relating to roads, water systems, power and other deserving areas of private sector.

Addressing journalists in Harare last week, Minister Chen pledged China's commitment to help Zimbabwe address its yawning infrastructure deficit soon after meeting Minister Biti in Harare last Friday.

"We should give support to the economic development of Zimbabwe as far as my job is concerned. We are confident about the future of Zimbabwe," he said.

Minister Chen said discussions with his Zimbabwean finance counterpart had centred largely on infrastructure projects and other ways in which his country could promote trade with Zimbabwe.

There is no country in the world better placed to help the process for Zimbabwe's economic recovery and growth than China due to the level of its influence in the global economics and also opportunities that can be exploited between the two countries for mutual benefit.

China has the world's largest foreign currency reserves at over US$3,2 trillion and what Zimbabwe requires to address its infrastructure challenges, is just but a drop in the ocean compared to the Asian country"s foreign exchange reserves. Zimbabwe would welcome China's investment in infrastructure with both hands given the pressure on its overcommitted National Budget of merely US$3,6 billion, most of which goes to recurrent expenditure. There can never be a better time for China and Zimbabwe to explore mutually beneficial economic relations as strong as their political ties.

Considering China's global economic influence, Zimbabwe needs to move with speed and follow through the pledge China has made, which would see China taking in its step Zimbabwe's economic growth.

In the past decade, the trade volume between China and Africa has increased with an average annual rate of 35 percent, from US$10 billion in 2000 to over US$160 billion in 2011. China has replaced the United States to become the largest trading partner to Africa in 2009.

The more than US$7,3 trillion economy, the world's second largest after the United States, has huge appetite for African resources and will remain so for a long time as more of its people scale the social ladder.

Africa has also grown rapidly to become China's second largest project contracting market and fourth largest overseas investment destination.

One of the reasons China's trade and investment relations with Africa have grown at tremendous pace is Africa's resource rich status and Zimbabwe remains one under-explored country in this regard.

Speaking after meeting Mr Chen, Minister Biti said Government sought investment from China in light of its overstretched National Budget and little fiscal space to be able to fund key infrastructure projects.

"I must say we had very fruitful discussions which hopefully might something materialising in the next few weeks as we all know there are many things that China and Zimbabwe have been discussion for a long time. The projects we are specifically talking about are the Kariba Hydropower Station, Hwange Thermal Power Station and the Zambezi Water Project," he said.

The African Development Bank estimates that Zimbabwe has a yawning infrastructure deficit that requires about US$14 billion to address.

China and Zimbabwe have enjoyed long periods of cordial relations dating back to the days of Zimbabwe's liberation war struggle against Britain.

And China has also made several huge investments in the country and some of its notable capital projects in the country include Sino Cement in Gweru and Anjin Diamonds in the Chiadzwa diamond fields.

State-owned Chinese company Shandong Taishan Sunlight Group plans to invest up to US$2 billion to develop coal mines, coal-bed methane extraction and power projects in a western province of Zimbabwe.

A Sino-Zimbabwe joint venture agreement has been signed and it has secured a coal concession of 100 000 hectares in Matabeleland North Province, with reserves of more than two billion tonnes of coal.

An open-cast mine is expected to be developed with a capacity of 3 billion tonnes of coal a year from the project.

The construction of a 600-megawatt coal-fired thermal power station is scheduled for commissioning in 2015. The project is also expected to have a coking coal plant with production capacity of 300 000 tonnes of coke annually. Former Chinese ambassador to Zimbabwe Mr Xin Shukang last year said trade between China and Zimbabwe had doubled to US$800 million in the two years to 2012 and set to breach US$1 billion by end of last year.

The Chinese Development Bank last year reported that it planned US$10 billion worth of investments in Zimbabwe over the next five years, and Chinese cotton merchant Sinotex is involved in a US$500 million cotton production deal with more than 300 000 rural farmers.


China-Uganda friendship association launched

The Vice President Edward Kiwanuka Ssekandi has hailed relations between China and Uganda and called upon Ugandan business persons, academicians and cultural entities to take advantage of.

Ssekandi said that China was among the first countries to recognize Uganda as a sovereign State just three days after attaining her independence from the British becoming Uganda's friend and ally.

Ssekandi who presided over the launch of the China-Africa Friendship Association at Hotel Africana in Kampala said friendship between the two countries has since grown into a successful and fruitful relationship in the 50 years of interaction as nations and peoples.

He said it had become a source of motivation and trust in strengthening relations between the two countries at the Government level and had contributed to stronger socio-economic ties between the two peoples. 

Ssekandi said there are over 7,000 Chinese living and operating over 100 businesses in Kampala alone and a reasonable number of Ugandans living and trading in various cities of China. He called upon Ugandans to use the association to do business with the Chinese as partners. 

The Vice President described the launch as a significant block which has been added to the 50-year old bilateral relations between Uganda and China 

He said it is now the Government's wish to ensure that the coming years are characterized by increased balance of trade between China and Uganda as well as technological and scientific transfer from China to Uganda and cultural exchanges to contribute to Uganda's development.

He commended the efforts of the Chinese People's Association for Friendship with Foreign Countries, the Chinese Africa People's Association and Wenzhou Enterprise Chamber of Commerce of Beijing for playing a key role towards the birth of CAFAU.

He challenged the China - Africa Association to attract investment by presenting Uganda's potential regarding available business opportunities describing the launch as another milestone in Uganda's 50 years and commended members of the association for their noble vision of cementing the social, cultural and economic ties between the two peoples.

The Chinese Ambassador to Uganda Zhao Ya Li assured Ugandans of continued socio economic, cultural and bilateral relations between the two countries saying China holds Uganda in high esteem for her contribution to the peace and security on the continent.

The ceremony was also attended by the Minister for Tourism and wildlife Maria Mutagamba, State Ministers for Privatization Aston Kajara, office of Vice President Vincent Nyanzi and Uganda's Ambassador to China Charles Wagidoso Madibo, several Ugandan and Chinese traders.


Chinese investor to make security doors in Nairobi

A Chinese investor has set up a factory in Nairobi to manufacture security doors locally for the Kenyan homes market.

Security doors are mainly imported and local production will reduce the cost by a fifth compared to imports, according to J&K Enterprises managing director Li Shunkang.

The Sh250 million factory in Nairobi's Industrial Area has a capacity to churn out 100,000 doors a year. It was commissioned on Friday to officially start production. A door will retail at Sh20,000 compared to the average price of Sh25,000 for imports.

"We expect to deliver the first batch within the week," Shunkang said, adding that there will be transfer of Chinese construction technology to Kenya.

The factory currently employs about 70 people, a number that could rise when it starts operating in full capacity. Rising labour costs in China are a key factor informing a shift by Chinese investors to major export destinations to manufacture commodities that will retail at relatively cheaper prices.

Eleven-month data for 2012 from the Kenya National Bureau of Statistics shows the value of imports from China amounted to Sh154.7 billion.


Last modified on Tuesday, 19 March 2013 10:44