Sino-Africa ties beneficial

China launched this blueprint in January this year. The policy aims to promote steady growth of the Sino-Africa relations in the long term and to propel mutually beneficial co-operation to new and higher levels through a non-interventionist and non-ideological strategy. The policy offers the right mix of policies that allow this vast continent to take advantage of the opportunities on offer while ensuring that it supports rather than erodes the modest economic gains Africa had registered on its own. “There has never been a comparative scale of national economic development as to what is going on in China today,” Zimbabwe’s Ambassador to China Christopher Mutsvangwa told The Southern Times in an interview recently in Beijing. “China is now the fourth largest economy in the world having surpassed UK and France. In every major sector of manufacturing, China is number one. It is now the factory of the world.” In the past Africa’s markets were limited to the West which through its capitalist ideology sought to control and push down commodity prices something that led to Africa not getting what it deserved for its resources. Stories abound of multinational corporations that interfered in the governance of African countries by funding dictatorships and coups which led to instability. Instability provided a fertile ground for multinationals for Western countries to exploit and plunder the continent’s resources without benefiting Africans in any way. Furthermore, if one African government failed to agree with the West ideologically, the multinationals closed the mines, factories and plantations, withdrew capital and technology leading to the collapse of the economy. In Zambia, a number copper mines were closed when that country’s founding president, Kenneth Kaunda, was still in power and had nationalised major companies. The West controlled the prices and markets and used this as a powerful weapon to fight African leaders who were opposed to their ideology. A number of African countries such as Tanzania, Mozambique, Angola and others suffered a similar fate. China’s loan and its policy of non-interference has given Angola the power to turn down an International Monetary Fund conditional loan which attaches stringent conditions on economic transparency, auditing of books and corporate governance concerning its oil contracts. Today, the multinationals who had become accustomed to exploiting the continent’s resources are alarmed at China’s rapid push for increased trade with Africa. Western policymakers at the IMF and World Bank headquarters and the Western media alike have been taken by surprise by the growing Sino-Africa trade which has led to the revival of copper mines in Zambia and the Democratic Republic of Congo, Hwange Coal Mine and Mhangura Copper mine in Zimbabwe and oil mines in Angola. China will open a US$100 million copper smelting plant in Chambeshi, Zambia, and analysts say this will enable Zambia to surpass the 1970s peak production of 750 tonnes. The Asian giant is the biggest consumer of copper products. Angola is now the top source of crude imports to oil-hungry China replacing Saudi Arabia. According to Beijing-based industrial analysts, Angola shipped 2,12 million tonnes of crude to China in February ahead of Saudi Arabia’s 1,98 million tonnes. In January this year, Angola was China’s third biggest supplier shipping 1,55 million tonnes of crude just behind Iran’s 1,89 million tonnes and 1,56 million from Saudi Arabia ‘ the world’s largest oil exporting country. Angola is sub-Saharan Africa’s second largest oil producing country after Nigeria and analysts say it will double its production of crude oil in the next three years to reach the two million barrels per day mark by 2008. Beijing extended a US$2 billion line of credit to Angola which is emerging from a civil war which lasted nearly three decades. China aims to build its strategic reserves of about 100 million barrels in the coming five years and by the end of 2005, it had emerged as Angola’s second largest importer of that country’s petroleum ahead of the US. There is a growing demand for Zimbabwean coal which is being used in copper smelting plants in Zambia, something which is likely to send positive economic effects for this Southern African country which is going through a difficult economic period owing largely to sanctions imposed by the Western countries. The Chamber of Mines estimates that the value of Zimbabwe’s mining industry is about US$20 billion, which is beyond the country’s capability to take equity. If Zimbabwe takes advantage of China’s African Policy, this can unlock this value which translates roughly to about US$100 000 per person in Zimbabwe. Norinco Company of China has injected about US$14 million to kick start operations at Mhangura copper mine. China is both a investor and a consumer of the end product as opposed to traditional investors who are middlemen selling to China. Trade between China and Africa rose by 300 percent to US$40 billion from US$33 billion in 2005 on the back of increased oil imports and growing textile exports to Africa. Analysts say the rate of growth of the Sino-Africa trade is now threatening the dominance of the US and other Western countries. In 2004 US-Africa trade was pegged at US$44 billion something which China will surpass in the coming few months after it struck and expanded existing oil deals with Angola, Algeria, Chad, Equatorial Guinea, Gabon, Nigeria and Sudan. With all this huge opportunity, Africa must react with foresight and with a sense of context to China’s African Policy which is an important vehicle for economic growth and prosperity in Africa. Already, economic growth registered by South Africa last year is largely attributed to China’s huge demand for South African minerals. The rising growth in trade between SA and China had enabled South Africa’s economy to grow by 5 percent. Mutsvangwa says it is now high time that Zimbabwean shake off the “zhing-zhong” myth ( a belief that China sells cheap stuff). “The motive behind this is to dissuade Zimbabweans from looking up China for business opportunities,” he says. “All businessmen the world over are eyeing China. About 95 percent of the world’s top companies are now doing business in China. “And when Zimbabwe tries to do the same, certain economic consultants and other so-called economic experts pour cold water on all efforts for our business men to do business with China,” he says. “These economic analysts are simply being dishonest. What are they teaching at our business schools when every top university in the world is teaching about doing business in China.” There is a huge traffic of top business executives who are flocking China to do business. All the major Western universities are falling over each other to open faculties in China because of huge opportunities that this Asian giant presents. “Economic consultants who discourage our people from doing business in China are charlatans, they are being unfair not only to the country but to the emerging intellectuals of Zimbabwe,” Mutsvangwa says. He says Zimbabwean businessmen must not be misled into believing that the West is everything. “Zimbabwean business executives suffer from a stunted vision that owes more to a politicised vision of world economic affairs,” he says. “They are refusing to accept the reality. The biggest market for each category of minerals which Zimbabwe produces is China. China is now the biggest consumer of platinum jewellery ahead of Japan.” “Some people want to mislead the Zimbabwean public into believing that platinum and other precious minerals are exported to Australia or the UK. This is to deliberately keep China, the biggest market out the picture,” Mutsvangwa says. It is estimated that by the end of this year, China’s foreign currency will hit US$1 trillion making China the world second largest economy after the US. If America, Britain, Japan, South Korea, France and other Western countries are all doing business in China, Africa should not be an exception. They should just follow world trends. “Kana muri musango tsuro inoteera pakafamba nzou,” says Mutsvangwa. “Its so simple, just follow everyone going to China.” There are more than 700 Chinese firms operating in 49 African countries which analysts say will help the continent to register a growth of 5,8 percent owing to the growing Sino-Africa trade. China has scrapped tariffs for many products from Africa and cancelled debts worth US$1,2 billion owed to it by countries on the continent. China’s African policy is there to reduce barrier to trade, to develop common ground and to advance the values shared by China and Africa. In doing so this policy will not only smoothen bilateral relations but set precedents for other important issues of trade to be addressed on a larger scale.

April 2006
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