The global economic slowdown is making developed and developing nations nervous about the future prospects of businesses and their overall economies. But China has used this time to reassure African nations about its support in trade and aid along with its commitment towards infrastructure development in these countries. China’s vast foreign exchange reserves are also likely to be used for global acquisitions wtrith Africa featuring prominently in the list of countries short-listed by China. According to Craig Bond, Chief executive of South Africa Standard Bank China, “now is the best time for Chinese firms to invest in Africa”. This is because opportunities have arisen after many developed countries have withdrawn their investments in Africa.
China’s imports from Africa amounted to $56 billion in 2008 against exports of $50.8 billion. Its imports have been largely confined to oil and minerals from Zambia, Angola, Nigeria, Sudan, and the Democratic Republic of Congo. China is one of the top ten investors in Mozambique involved mainly in the construction sector.
Africa forms an important part of the foreign policy initiatives of Chinese President Hu Jintao. His trip to African countries was a successful attempt at cementing ties further. China has shown its earnest commitment to African development by partially canceling the debts owed by some of the poorest African countries and lifting tariffs on the goods produced by them.
Dr. Martyn Davies, CEO of frontier Advisory and executive director of Center of Chinese Studies, Stellenbosch University, finds that China and Africa are mutually dependent on each other. China’s image in the world’s eyes has changed since it started its economic assistance programs in African countries. He feels that a new ”coupling” is taking place between the growth of Africa with the growth of China. Demand for African goods crops up not just from large cities like Shanghai but also cities and towns falling in the second and third tier, which are seeing growth in terms of basic infrastructure. Economists all over the world that China will be the first country to come out of the economic downturn the world is passing through. Africa’s growth that is deeply intertwined with China’s progress, will subsequently show signs of revival.
Source : Chinafrica
Tags: Africa, China, investment
