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



G-20 –what is that?

Vendredi, avril 10th, 2009

All the across the world, economists believed that G-20 in London this year meet was a tremendous success. There were some excellent agreements that the nations backed. One of them was raising $1.1 million dollars to help the world in sustaining the global economic recession. In the final talks and resolutions it was agreed that more money should be given to the countries that fit the poor standards of living. This included $500 billion fund from IMF to the “under pressure” economies. Out of this capital, $100 billion is for the poorest nations.

Ironically Africa has the maximum number of poor nations, but it was not mentioned anywhere in the 30 page final statement. And on the contrary Africa is mentioned as a developing nation.

Even though China, India and Brazil lead the pack of the poor countries at G-20, it was only South Africa that could get some place in the G-20 meet.

China invests in Africa

China is making a huge Foreign Direct Investment in Uganda thereby reversing the global recession. As a matter of fact China has surpassed Britain’s position in the FDI category and has massively invested in Sudan, Nigeria and other African countries. China was ranking 8th in the FDI investments in Africa from many decades. But it now stands at number 2 as being the 2nd largest source of FDI. This is because of the huge amounts that it is investing and promising to invest here. China has opened around 12 projects that are valued at $13.5 million. These projects are likely to create 1,495 jobs in the near future in Uganda. The bio fuel industry is also getting attention and China is investing $50 million in it. It is likely to create 2,087 jobs in Uganda.

Thus even though there is a financial crisis in the entire world, Uganda is actually stable and getting more and more FDIs. In the first quarter of this year, Uganda has given license to approximately 83 planned investments that are worth $223.4 million. This investment will produce a total of 13,000 jobs. Once these projects initialize Uganda’s economy will be given a boost.

Source : China Africa



China Africa economic

Mardi, avril 7th, 2009

China has won accolades as the most popular partner of developing countries. This came its way from the Tanzanian President Jakaya Kikwete at the G20 summit. China has certainly been playing an active role in the global economic arena, trying to tone down the impact of the economic crisis by promising aid, increasing trade relations with developing countries particularly those in the African continent. It has written off bad debts and is using its surplus currency reserves to invest in developmental projects in Africa, thereby generating employment and entering sectors that the western nations walked out of, due to the crisis.

China is not merely a quiet investor and trading nation for Africa.  Not only has it moved towards acquiring raw material assets in Africa, it has boosted infrastructure development with its investments. It is sharing technical expertise, helping in improving agricultural output, and ensuring a market for African goods that were losing out as western demand fell drastically. For many African countries, China is the biggest export market. China is adopting every possible strategy to get Africa on to the fast track of development, and is showing its responsibility as an Asian powerhouse and a global economic leader. The first of its kind, an 88-day expedition is starting at Ghana, organized by the Yunnan Committee of the Chinese People’s Political Consultative Conference. The expedition will cross seven countries including Ghana, Burkina Faso, Mali, Niger, Algeria, Libya and Egypt, culminating at the Red Sea and involving a trek of over 7800 kilometers. This is the first time a Chinese team has ventured to cross Africa from the West to the East. Besides studying environmental issues like desertification and preservation of habitats for wild life, the members of the team will serve as goodwill ambassadors for China, and also enhance awareness among their Chinese countrymen about Africa’s developmental and investment potential and tourist charm. There is a growing Chinese middle class with funds to spare for recreational activities, and China is prodding them towards exploring the beauties and bounties of nature that Africa has to offer.

Source : China Africa