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Building a path to success

Updated: 2013-02-22 11:35
By Zhang Qizuo ( China Daily)

Hand of help can be seen on the milestones of Africa's road to integration

Economic integration has played a pivotal role in bringing Africa together and acts as a pillar for a peaceful and stable continent.

China's rapid economic development has prompted increased demand for resources, and its products also need a broader market.

Africa, on the other hand, as part of the African Union program New Partnership for Africa's Development, seeks international cooperation in capital, technology, equipment, personnel and infrastructure. Strong economic complementarity between China and Africa has thus drawn them much closer together.

That is why China is intent on strengthening its economic ties with Africa, promoting the continent's integration so that its countries can build their own sustainable industrial systems, becoming destinations for foreign investment.

Poor infrastructure hinders integration, which is why building it is one of the key areas of China-Africa economic and trade cooperation. China attaches great importance to improving Africa's infrastructure by building homes, roads, bridges, railways, airports, ports, communications, electricity, drainage and hospitals. This is done by way of financing, aid projects, contracting and investment cooperation.

In Africa's economic integration the results are there for all to see. The Chinese government has provided numerous preferential loans to support Chinese financial institutions expanding the scale of commercial loans in Africa. Especially since the Forum on China-Africa Cooperation was set up in 2000, China's financing to Africa has increased. From 2007 to 2009 it provided $5 billion in preferential loans and export buyers' credit; from 2010 to 2012 it provided $10 billion in preferential loans. The preferential loans have included funds to build airports, housing estates and hydropower stations.

China and the African Union have made considerable progress in their joint work, and economic cooperation has become a significant feature of the China-Africa relationship. In each of the three years to 2011 China was Africa's largest trading partner, trade being worth a record $166.3 billion in the last of these years, accounting for more than half of Africa's total foreign trade.

In contrast with bleak economic performances in Europe and the US, trade between China and Africa remained robust and made a significant contribution not only to Africa but to world economic recovery.

There can be no doubt that China has played an irreplaceable role in promoting African integration. China is focusing on five areas in promoting the continent's economic growth.

The first is to continue to expand the scale of trade. Some African countries have trade deficits with China, which has expanded the range of zero-tariff treatment of the commodities of 31 less developed economies, and encourages enterprises to give preference to imports from the continent. At the same time, the Ministry of Commerce plans to optimize the structure of export commodities to Africa.

Second, China and Africa are looking for new ways in which they can work together. China is using the China-Africa Development Fund to its fullest to support Chinese enterprises, one aim being to help Africa to accelerate the pace of infrastructure construction, and improve transport, communications and the development of manufacturing and processing industries. The aim also is to lift agricultural production and work together in tourism, finance, science and technology and environmental protection.

Third, the Chinese government continues to expand the scale of aid to Africa, with no political strings attached. The focus is on building hospitals, schools, stadiums and other social, cultural and public projects.

Fourth, full play is being given to the role of enterprises in the market, with efforts to promote policies on business cooperation, financial, legal and information services, and to give more companies a role to play.

Fifth, help is being given to African countries with funding problems. The Chinese government supports its financial institutions in strengthening exchanges and cooperation between enterprises on both sides with a full range of financial services.

Chinese financial institutions have set up branches or representative offices in countries such as Zambia, South Africa and Egypt. Financial institutions in Africa are also expanding business with China. By the end of 2009, six banks from five countries - Cameroon, Egypt, Morocco, Nigeria and South Africa - had set up branches or representative offices in China.

It is clear that economic development is the most pressing problem that Africa faces, and a lack of technology and talent are major factors constraining growth.

China attaches great importance to bolstering the continent's human resources by dispatching foreign aid experts and volunteers to the continent. Efforts to help Africa bolster its own human resources are reflected in the ambitions of the FOCAC to build joint research and exchange programs, economic professional personnel training and short-term exchanges among universities and think tanks.

Only by allowing African officials, business executives and technical personnel to master the knowledge needed can African integration become a reality.

The author is a professor of economics and vice-president at Chengdu University who specializes in China-Africa trade and investment. The views do not necessarily reflect those of China Daily.

(China Daily 02/22/2013 page7)

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