China sticking with Africa through hardship
- By He Wenping
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E-mail Global Times, March 29, 2016
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Direct flights between Johannesburg and Beijing resumes in November 2015 |
Since the mid-1990s, African economies have been booming, with an annual average growth rate of approximately 6 percent. Inflation has been controlled, and financial conditions are also gradually improving in the continent. Given such progress, the Economist published a front page story entitled "Africa rising," pointing out that over the past decade, six of the world's 10 fastest-growing countries were African, and in eight of the past 10 years, Africa grew even faster than East Asia.
However, the continent's economic growth has been slowing in recent years. According to a latest IMF report "Regional Economic Outlook: Sub-Saharan Africa," sub-Saharan Africa's economic growth fell to 3.75 percent in 2015, which will then pick up slightly to 4.25 percent in 2016. These numbers are lower than the 4.4 percent average growth rate over the past 20 years, and far from the 6.4 percent growth between 2002 and 2008.
The cause of the downturn of African economic growth lies beyond doubt in the sluggish global economy, and the falling price of oil and other bulk commodities. But certain Western media argue that China's economic slowdown is responsible for Africa's economic slump.
Compared with the rapidly increasing demand for the raw materials in the past, China's current demands are declining, but the Chinese economy is still a significant driving engine of Africa's development.
So far, China has been Africa's largest trading partner for seven consecutive years. Over 3,000 Chinese companies are investing in the continent. China has also pledged $60 billion for 10 major China-Africa cooperation plans in December last year.
Among the collaborations in industrialization, agricultural modernization, infrastructure, financial services, green development, trade and investment facilitation, poverty reduction and public welfare, public health, people-to-people exchanges, and peace and security, Sino-African industrialization cooperation has been placed as the priority.
In order to smooth implementation of this measure, promote African countries' ability to independently develop, and help them ease financing pressure, a China-Africa production capacity cooperation fund with initial capital of $10 billion was established under the framework of the 10 major cooperation plans. A total of $10 billion was also provided for the China-Africa Development Fund and the Special Loan for the Development of African SMEs each.
China has largely strengthened Sino-African cooperation despite facing the pressure of its own economic slowdown. It fully reflects Beijing's determination to promote the continent's development and go through hardship with Africa together.
This is what complementary bilateral ties need in the new era.
The falling price of oil and bulk commodities has mainly influenced the eight oil-producing nations and certain resource-exporting countries in Africa. Most of the low-income economies have been keeping a strong growth because of the constant infrastructural construction and huge consumer demand.
The IMF has predicted last year that Cote d'Ivoire, Ethiopia, and Tanzania are expected to continue to grow at 7 percent or more in 2016.
Given the stable political environment, development of production departments and discoveries of new energy sources, there is a great potential in the future development of Africa, which might even outrun Asia.
The author is a senior research fellow at the Charhar Institute and a research fellow at the Institute of West-Asian and African Studies, Chinese Academy of Social Sciences.
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