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    The World Economic Forum And China Investment

    Vendredi, juin 26th, 2009

    China is not going to step back from the path of investment it has been following in Africa. This was stated by Jiang Jianqing, the President of China’s ICBC Bank at the World Economic Forum on Africa that took place in Cape Town last week. China’s investment into Africa will benefit both sides at a time when globalization is widening the economic horizons of all the countries, especially China which is pursuing investment opportunities all over the world.

    Jiang Jianqing is co-chairing the 19th WEF meet that is discussing the issue of “Implications of Global Economic Crisis For Africa”. In this context, the President felt that the global financial system needed to be monitored diligently. This would avert crisis like the present one in the future. According to him, the global capital markets did not recognize national boundaries. The ICBC Bank has the distinction of being the world’s largest bank in terms of assets, and has also bought a 20% stake in South Africa’s largest bank, The Standard Bank. The two banks have been scouring the length and breadth of the African continent looking for appropriate investment opportunities. The two banks have already jointly short-listed at least 60 projects in Africa for making investments. Their largest combined investment is close to the signing stage, namely the $800 million funding of the Botswana power station. This would be a twenty-year commitment. Others include mining projects and those connected infrastructure development in many African countries. The alliance is of strategic importance for both countries since the ICBC is flush with funds and Africa has asset bases whose value is presently at their lowest, providing the golden opportunity to the bank to acquire a stake in them. Both sides stand to gain in the process, since ICBC Bank also cannot remain unaffected by the crisis and has had to scale back its growth figures. It is now looking for ways to make up and thereby show improved growth prospects in 2010.

    The World Economic Forum on Africa and its focus on the financial sector has been an eye opener for the rest of the world as well. Optimism about the coming year helped the meet end on a positive note.

    Source : China Africa

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    The World Economic Forum Meet And the China Connection

    Mercredi, juin 17th, 2009

    The World Economic Forum on Africa opened earlier this week, and deep concerns about Africa’s growth and development came to the fore. African nations needed to present a unified front for the developed markets to deal with, instead of the existing market barriers. Africa has been adversely affected by the protectionist stand taken by rich countries, even though it has had rich, mineral resources, a young enthusiastic population and the urge to surge ahead. But its indebtedness was a major impediment to its progress. These were some of the facts highlighted by South African President Jacob Zuma at the opening of the World Economic Forum on Africa being held at Cape Town.

    The WEF has numerous issues on its agenda and one of the topics of discussion is the trade relationship with China, which crossed the $106 billion mark last year. While many perceive China’s helping hand as one of grabbing and exploiting Africa’s mineral wealth to secure its own resource channels, there is no denying the development that has taken place in Africa due to China’s funding and expertise. China’s involvement in the financial sector in Africa will also be discussed, and one of the key dignitaries is the President of the Industrial and Commercial Bank of China, Jiang Jianqing.

    Other issues to be discussed at the Forum will include agriculture, foreign investment in Africa, and Zimbabwe’s economic recovery. The impact of the worldwide financial crisis on African economies is also being pondered over. It has led to a slower rate of growth in Africa despite all efforts by china to pitch in where the western countries had backed off.

    Africa sees in China, a supporter to turn to for aid, advice and assistance, not to mention technical expertise for all its developmental projects. China in turn, has reiterated its commitment time and again to Africa’s growth and development. If nothing else, there is a complete give-and-take relationship between the two sides. The further progress of China is dependent on Africa’s supply of minerals and oil and the development of Africa is linked to China’s funding and investment more than any other country.

    Source : China Africa

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    Strategic Moves in Africa Signal China’s Long Term Plans

    Mardi, avril 28th, 2009

    China has been comparatively less affected by the global economic crisis, and it has been using this time to formulate long-term strategies and put systems in place to achieve its goals. It has been buying manufacturing units in African countries, consolidating its hold on supply of raw materials, taking fertile agricultural land on long lease, contributing $40 billion to the IMF, and trying to assert its position in global economic forums.

    China has done all this and has gone a step further to use this time to rethink its old commitments and withdraw where it feels it may have erred or pushed ahead too fast, and also take corrective action where fingers are being pointed towards its participation. In its initial attempts to assist African nations, it had provided unconditional economic aid and support to many countries so that they could develop their infrastructure facilities so that their citizens could enjoy a better quality of life. At that point in time the Chinese had a single-minded commitment to growth at any cost. But times have changed and many African nations have not been able to show results of the kind China wanted to see. They remain politically risky and human rights abuse continues unabated. Hence, the rethink on the part of China to withdraw, and pursue investments in places where growth can be sustained and that too, without global criticism.

    Congo and Guinea are two African countries that have seen plenty of Chinese funds flowing in for investment, as china saw enormous potential. Today also, the countries remain as unsafe and risky as ever before. Therefore, China has decided to scale back its operations in these two African nations, and keep in mind the risk percentage before making further commitments. This would in no way affect the total amount of investment China has put aside for Africa, it may only imply that China would look for other places to assign funds that were meant for these countries. Perhaps China would now prefer in invest in nations that are stable, law-abiding, and democratic in terms of leadership, to ensure the best prospects for its fifty years of investing in Africa.

    Source : Suppliers Africa

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    China trade with africa, amidst Global Crunch

    Mercredi, avril 22nd, 2009

    After the G20 meet in London, the G20 nations promised a US$ 5 billion amount for financing new trades in Africa. This was followed by an announcement made by International Finance Corporation to give the first lot of money to the Standard Bank in South Africa.

    This exercise was done because the importers and exporters of the emerging markets are facing the global crisis. The banks are not really willing to give help to the local exporters. Actually this is a wave effect in which if the first world buyers are unable to secure loans, how will the emerging markets get it. Therefore a need was there to inject money in the economy of Africa and Standard Bank was the best option since it is the biggest bank in Africa with a huge presence.

    China has also come to the rescue of this situation and last year the Industrial and Commercial Bank of China (which is the world’s richest bank having around US$ 1.3 trillion), bought 20% stake in the Standard Bank at US $ 6 billion. This has eased the flow of trade relations between China and Africa. The CEO of Standard Bank Africa has been sent to Beijing to ensure that trading continues to be smoother.

    The Standard Bank has large presence in the local African mineral trading. It has helped people in the agriculture sector also. With China’s stake in the bank, it would be easy for it to tap these markets too. With IFC injecting so much money in Standard Bank, the China – Africa trades went up by 45% last year. China on the other hand has promised to give US$1.5 billion to the IFC’s trade liquidity program. Now this is an excellent gesture from China. China also provides finance through African Development Bank and Development Bank for East and South Africa.

    The Kenyan trade with China went up 7.5 times, between the period 2003-07, from KES 6.6 billion to KES 45.7 billion. This is just an example of one of the country and China’s trading has increased in more African countries over the past few years. The demand for trading Africa is on a rise; hence this demand will not decline despite the global crisis. Thus China will continue trading and the African traders will continue obtaining the finances they require.

    Source : Manufacturers Africa

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    China’s Exports Improve In March, Trade Surplus Up To $18.6 Billion

    Vendredi, avril 17th, 2009
    It was still a two-digit  drop from a year earlier for China’s exports in March, but the drop was smaller than in February, considered as another sign that the worst  status of the economy could be over.

    Exports in March fell 17.1 percent from a year earlier to reach $90.29 billion, the fifth straight monthly drop, the General Administration of Customs announced Friday (Apr 10).

    In February, the country’s exports posted the worst decline in over 10 years at  25.7 percent year-on-year.

    « This indicates a sign of improvement in the country’s foreign trade, » the customs agency said.

    The agency noted that exports in March rose 32.8 percent from February while imports grew 14 percent month-on-month.

    China’s export industries, which account for about 40 percent of its GDP, have been hit hard with the very low demand for goods from the United States and other countries during the current world economic crisis.

    While the exports are still expected to be in decline, but the fall is smaller than expected.

    « A ray of hope may be emerging with signs of China’s economy bottoming out by mid-2009, » the World Bank said Tuesday in a statement. « A recovery in China — fueled largely by the country’s huge economic stimulus package — is likely to begin this year and take full hold in 2010, potentially contributing to the region’s stabilization, and perhaps recovery. »

    With the improved export performance. trade surplus rose to $18.56 billion, up 41.2 percent from a year earlier. This was compared with $4.84 billion in February.

    The National Bureau of Statistics purchasing managers’ index, a gauge of manufacturing activity, stood for the first time in months, at 52.4 in March, indicating an expansion in the manufacturing sector.

    The figures conflicted with an alternative index published by brokerage CLSA Asia-Pacific Markets that showed a contraction and continued deterioration in manufacturing activity, however. What is consistent in the indices issued by both groups are the increasing trends in PMI.

    Source : Konaxis

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