Increased collaboration between Africa and China continues to
play a role in Africa's growth, economists said yesterday.
Trade between Africa and China and investments in the continent
have helped to build up the region's infrastructure, Razia Khan,
the Standard Chartered Bank's regional head of research for Africa,
said yesterday.
"It would be wrong to think of China's role in Africa as being
about commodity trade alone," she added.
Africa's economic growth has outperformed global growth since
2001 and in most of Africa, fundamentals have been strong, she
said.
Khan attributed much of the growth to domestic reforms initiated
by African governments. Meanwhile, "the favorable external
environment, with increased engagement between Africa and China,
has also played a key role."
Currently, Africa's trade with Asia - and with China in
particular - is growing rapidly and Africa has benefited from
growing trade flows with Asia though Europe remains Africa's
dominant trading partner.
Standard Chartered Bank's statistics show that in the late 1990s
China-Africa trade accounted for a little more than US$5 billion
annually, but since then it has grown ten-fold.
China has announced it will cancel debts to 33 African countries
by the end of 2005. The country also said it will grant zero-tariff
to many African exports, a move likely to benefit 30 less-developed
African countries.
These measures are significant as an indicator of China's
intentions towards Africa, Khan added.
Africa's services sector is also expected to receive a boost as
the number of Chinese tourists visiting Africa increases, according
to a Standard Chartered research note.
The Chinese government has promised to step up China-Africa
cooperation in transportation, communication, water conservancy,
electricity and other infrastructures.
Chinese companies are active in various infrastructure projects,
including roads, bridges, schools, shopping centers, office
buildings and low-cost housing.
China's role in improving Africa's infrastructure holds much
promise for further diversification of African countries' exports.
China can also help them to move up the value chain, Khan said.
"One of the greatest constraints faced by commercial agriculture
in Africa is the poor state of the continent's current
infrastructure. Any intervention in this regard could therefore be
transformative," she said.
Given China's assistance to correct the chronic investor
undervaluation of Africa, and contribution to new investment from
both China and elsewhere, it would be wrong to characterize
Sino-African engagement as being about commodities alone, she
said.
"China's industrialization has changed the profile of global
trade and created a vibrant trade corridor with Africa. The
burgeoning trade relationship is based on more than just
commodities," said Abah Ofon, global research economist in Africa
at the Standard Chartered Bank.
In addition to the infrastructure construction and aid
provision, the development of the African capital market is another
area in which Asian influences have been significant.
The recent record of macroeconomic progress in Africa, combined
with commodity price strength, has been an important driver of new
foreign investor interest in African debt market, Khan said.
(China Daily May 15, 2007)
