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TRADE: What Will China’s Legacy in Africa be by 2049?

Stephanie Nieuwoudt

CAPE TOWN, Oct 26 2009 (IPS) - With its recent history of tremendous economic growth, China has a few lessons to teach Africans. But African governments should be vigilant in ensuring that their countries also reap benefits from their relations with China.

This warning emanated from a number of participants at the China-Africa Business Summit held Oct. 22-23, sponsored jointly by Corporate Africa, a publication of the UK-based Times Media Group, and the China-Africa Business Council, a non-governmental organisation promoting private investments in Africa.

Surprisingly, given China’s ever-growing presence on the continent, the attendance figure at the summit was far below the expected 1,000, with only about 100 delegates arriving, forcing a last minute change of venue.

But some fascinating inputs were nevertheless made. Professor Festus Fajana, a trade policy expert at the African Union, said that "equal partnerships are important to ensure sustainable development". He urged African governments to be vigilant in ensuring that bilateral agreements with China are of mutual benefit.

"Africa wants sustainable economic growth and the continent wants diversified economies in order to reduce dependence on its traditional (Western) trade partners," explained Fajana. "Africa exports 80 percent of its oil and minerals to China. But Africa should not just be seen as a source of raw materials.

"Its economies should be diversified to take advantage of the huge Chinese market with its need for other products as well. There is, for example, great potential for agricultural products to be exported to China," he suggested.

The world is seeing a new "coupling" of Southern countries and China, with the latter’s insatiable demand for minerals underpinning the growth of sub-Saharan African economies, stated Dr Martyn Davies, executive director at the Centre for Chinese Studies attached to the University of Stellenbosch near Cape Town.

The centre promotes exchanges of ideas, experiences and knowledge with a view to promoting analysis of the relations between Africa and China.

He believes that, "China’s growth will depend on Africa’s ability to supply those goods." Likewise, Africa’s advancement is related to the well-being of China. "China is on target to easily meet a GDP (gross domestic product) growth of eight percent. This is no mean feat in the current economic climate."

Trade between China and Africa in 2008 was worth 107 billion dollars – a 45 percent increase from 2007.

China has been under intermittent fire about its bad human rights and environmental record and its disregard for democratic practice. It was recently slated for closing a seven billion dollar deal with Guinea, a country that suffered a military coup at the end of 2008. Several audience members found an echo in Africans’ experience of China on the continent.

"Ordinary citizens get very little in turn," one delegate argued. "Government officials sign deals and pocket huge sums of money. The Chinese come to Africa and take our riches away. But the Chinese markets are closed to African entrepreneurs."

Regarding a way forward that could benefit both Africans and Chinese, Dr Rita Cooma, CEO of a New York-based management consulting firm, presented an investment model that could maximize value and investor returns with mutual pay-offs.

The model focuses on government practices and social equity (which recognises the rights and needs of citizens), economic prosperity (maintaining stable levels of economic growth and employment) and environmental sustainability (the prudent use of natural resources and effective protection of the environment).

Cooma emphasised the need for the training and development of African entrepreneurs by Chinese organisations.

The Chinese are highly skilled in disciplines like engineering and in industries such as telecommunications – skills that are severely lacking in Africa. Chinese investors should employ African citizens and not use an imported Chinese workforce, one of the main gripes with Chinese business practice on the continent.

"Investing in schools and healthcare facilities strengthen the labour supply and contribute to economic and social development," added Cooma.

To ensure accountability and transparency, Cooma recommended the development and global ratification of disclosure standards that have to be adhered to by investor and host country. These standards pertain to labour and environmental practices.

There should also be a global reporting initiative which collects data and reports on specific social, economic and environmental impacts.

"The question is: what will China’s legacy in Africa be by 2049?" Cooma asked.

"The proof of the pudding lies in the eating. Hundreds of millions of Chinese citizens have been removed from poverty. I have great faith that the Chinese can help Africa to the benefit of all," she enthused.

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