Tuesday, 17 September 2013 04:39

Newsletter 36

In this newsletter:

  • China-Africa Cooperation Reduces Conflicts
  • Economist - Chinese Labor-Intensive Enterprises Should Move to Africa
  • China to help South Sudan develop mining sector and infrastructure
  • China moves in to rebuild historic railway in Africa

China-Africa Cooperation Reduces Conflicts

Africa has gradually gained the importance and recognition it deserves in the complex play of international relations in the contemporary world, speaking with its own distinct voice and having its own clear objectives. Africa, then is a continent which suffers from the scourge wars and violence, this means that peace and security are inseparable from economic and social development. Traditionally, African conflicts have been the focus of preferential attention by the international community, mainly the United Nations, however, over recent years major headway has been made as regards achieving a raised awareness among and shouldering of responsibilities by African governments and institutions themselves, in relation to the need for a greater degree of in-house involvement in peace building and consolidation. It is becoming increasingly evident that the solutions to African conflicts must emerge and be led from within the continent itself, with the international community providing financial and logistical aid. Within this context, the African Union (AU) has made a concerted effort to build the African peace and security Architecture, creating the Peace and Security Council in 2002. Now the African continent is enabled to create a strong relationship with the People's Republic of China in all aspects.

This relation enhances the integration and cooperation between the two sides therefore they succeeded to find real cooperation under the new circumstances , to jointly meet the challenge of economic globalization and to promote common development , and in light of suggestions of some African countries , the result of the cooperation is that , the Chinese government made the proposal on the convocation of the Forum on China -Africa Cooperation in order to assist the African countries and develop their economies which were and still are suffering from the savage conflicts and civil war .
The programme for China - Africa Cooperation in economic and social development put forward at the first ministerial conference of the forum on China -Africa cooperation stipulates that the two sides agreed to set up a joint follow up mechanism to evaluate the progress in the implementation of the programme regularly. In July 2001, China and Africa held a ministerial consultation in Lusaka, capital of Zambia, in which the procedures of the follow up mechanism of the forum on China- Africa cooperation was discussed. The follow -up mechanism of the FOCAC is built on three levels : ministerial conference which is held every three years , the senior officials meeting and the senior officials preparatory meeting for the ministerial conference which was held a year before and several days before ministerial conference respectively . China and Africa shall hold a ministerial conference and senior officials meeting in turn, and this will pave the way for creating cooperation in all domains and strengthen the Sino-African economic cooperation and trade under the new circumstances, the forum on China -Africa cooperation and programme for China-Africa cooperation in economy and the direction for the new China-Africa strategic partnership of long -term stability and mutual benefits. China undertakes to reduce or cancel the debt amounting to 10 billion owed by the heavy indebted poor countries and least developed countries in Africa, in addition to that China set aside special funds to support and encourage investment by well -established Chinese enterprises in African countries to set up joint equity or co-operation projects. The African human resource development fund is established to help African countries with the training of professionals.


Economist - Chinese Labor-Intensive Enterprises Should Move to Africa

Xiamen — Chinese labor-intensive enterprises should relocate to Africa with its abundant young workforce, former chief economist and senior president at the World Bank Justin Yifu Lin said during the 17th China International Fair for Investment and Trade.

Rising labor costs are pinching businesses that relied on China's cheap workforce for years. Many labor-intensive businesses have already relocated to Vietnam, Cambodia, Myanmar and other South Asian nations.

In Lin's view, Africa is the obvious choice. "Africa has about 1 billion people and very young labor force. It's just like China in the 1980s. There is substantial room in Africa to accommodate China's labor intensive manufacturing," he said.

In contrast, the population of South Asian countries is relatively small, and the wages will go up soon, Lin said.

Although some argued that costal factories could move to China's hinterland rather than moving overseas, Lin said the country's central and western regions are already expensive.

While moving low-margin manufacturing to Africa, businesses can put more focus on the two ends of the "smiling curve", which depicts value-added in the industrial value chain, in China, he added.

In 2012, trade between China and Africa totaled 198.49 billion U.S. dollars, up 19.3 percent from a year ago, official data showed.


China to help South Sudan develop mining sector and infrastructure

JUBA — China will help South Sudan develop a mining sector and is in talks to lend it between $1bn and $2bn for road, power and agriculture projects, Oil and Mining Minister Stephen Dhieu Dau said on Monday.

Speaking at a joint news conference with Chinese ambassador Ma Qiang, Mr Dau said China would provide $43m to conduct a geological study to help South Sudan’s plans to hand out mining licences in its search for gold and other metals.

He gave no further details on the discussed loan.

China has been very active in the African continent as it tries to quench its huge appetite for natural resources.

In March, South Sudan signed a mining law to attract foreign investment, but officials and mining companies say it will take time to develop the sector because of the lack of almost any infrastructure or geological surveys.

South Sudan is Africa’s newest country, having seceded from its northern neighbour in 2011, after years of civil war.

Some officials in the new nation believe it has unexplored deposits of gold, diamonds, copper, uranium, chromite, manganese and iron ore.

"South Sudan will give Chinese companies the opportunity to invest in the Republic of South Sudan in the areas of petroleum and mining industries, and also in other economic circles," Mr Dau said. Under the new mining law, firms may apply for a five-year exploration permit, renewable for two five-year terms, with a maximum search area of 2,500km², and a 25-year large-scale mining permit.

Mr Qiang said in a brief statement that China wanted to boost economic co-operation, but did not mention the loan talks or take any questions from reporters.

"We want to enhance the friendship and the very good relationship with South Sudan … to encourage a lot of Chinese companies to join the development of South Sudan," Mr Qiang said.

China has sought to bolster ties with South Sudan where it has significant investments in the oil industry going back to the time before the secession from Khartoum in 2011.

A Chinese official denied in March it had promised $8bn in aid as announced by Juba last year, but said more could be offered if the country achieved a lasting peace. South Sudan’s economic development depends on good relations with long-time foe Sudan, through which the landlocked nation needs to export its crude. Sudan dropped last week a threat to close two export pipelines in a row over alleged support for Sudanese rebels.

Earlier this year, Sudanese President Mohammed al-Bashir had ordered the pipelines closed, and accused South Sudan of supporting rebel movements in his country.

But that decision was never carried out.

South Sudan has constantly denied supporting rebel movements in Sudan.

Last week, South Sudan said it was going to increase production of crude oil to about 200,000 barrels a day from 120,000 following an agreement with neighbouring Sudan to allow crude exports to pass without hindrances.

Both Mr Bashir and South Sudan President Salva Kiir agreed that they would create a "conducive environment for trade and development" at the Khartoum talks.

South Sudan has a capacity of producing 300,000 barrels a day.


China moves in to rebuild historic railway in Africa

More than a century ago, British engineers and their African and Indian labourers spent five years carving a railway through what would become Kenya in attempt to open up East Africa's interior.

By the time the 1,060-kilometre track reached the shores of Lake Victoria from Mombasa in 1901, the massively over-budget endeavour had been nicknamed "the lunatic express."

Now, it is to be built all over again - but this time by China. A new standard gauge track will be constructed from Kenya's coast on the Indian Ocean to its western border with Uganda. President Uhuru Kenyatta has struck a $5.2-billion deal with Xi Jinping, his Chinese counterpart.

This Chinese funding includes an array of projects, including new hydroelectric dams and the expansion of Kenya's ports, but the railway is expected to swallow most of the money.

Kenyatta describes the planned new railway as "important in the context of East Africa's shared goal of ensuring quicker movement of peoples, goods and services."

China's new engagement with Africa was "very similar to the British engagement in the past: railways, roads, bridges, major infrastructure," said Aly-Khan Satchu, a Kenyan economist. Today, big construction projects have fallen out of favour with Western donors. China has quickly stepped into the breach. Chinese car manufacturers and television stations all operate in Kenya.

Few doubt that new railways would help Kenya to sustain its economic growth, already running at a healthy annual rate of five per cent. A new rail link could knock 79 per cent off the cost of shifting freight across

East Africa, according to the government.

Some worry Kenyatta's tilt away from the West could alienate traditional allies and place all of Kenya's eggs in the Chinese basket. "Kenyatta feels he needs to rebalance towards China in particular," said Satchu. "It's clear why - China is Mr. Moneybags, and we need loads of money to leapfrog our infrastructure to modern standards."

For Charles Nderitu, a Nairobi businessman exporting sugar to the Gulf, all such discussion is academic.

"I'm looking at the bottom line, and if I can move my produce along some new fast cheap railway, instead of by (trucks) that cost so much and are always breaking down, I don't care who builds that railway," he said.


Last modified on Tuesday, 17 September 2013 05:11