China Makes Inroads Into Africa

China meets demands of African markets...

The positive business environment in Africa has already been noticed by the international community and investments into Africa have been flowing from various countries around the world. China, one of the fastest growing economies in the world, has already started making inroads into the African markets and established a special China-Africa Business Council recently.


Trade between China and Africa registed an unprecedented growth of ninefold between 1999 and 2003 and stands at approximately $18 billion. Trade analysyts expect this figure to reach a whopping $110 million by 2006.

China National Petroleum Company has acquired a 40 per cent stake in one of Sudan’s major oil exploration project and Chinese workers built a 1,600 kilometre long pipeline in Sudan in just 11 months. In fact, China has been actively partnering with African governemnts to meet its rising demand for oil. In March, 2004 the Chinese governemnt extended a soft loan of $2billion to Angola to secure a regular supply of 10,00 barels of oil per day.

In Zimbabwe, China has reportedly finalised a deal to supply the African nation with fighter jets and other military goods worth $200 million. Trade and tourism ties between China and Zimbabwe have been flourishing in recent years. A growing number of Chinese citizens are now travelling to Zimbabwe to enjoy the many tourist attractions that the country of Robert Mugabe as to offer. The increased trade and tourism ties between Zimbabwe and China has resulted in the announcement of twice-weekly direct flights between Harare and Beijing. In fact, speculation is rife that most western farmers in Zimbabwe will eventually be replaced by Chinese investors eager to invest in Zimbawe’s ailing tobbaco farming industry. Chinese companies are also reportedly vying to gain a major share of Zimbabwe’s lucrative mineral extration industry.

In Zambia, Chinese contractors have said to have won a contract worth $600 million to build a hydroelectric plant at Kague Gorge. Other Chinese construction companies are also reportdly working on lucrative contracts to build hotels, roads and bridges in Botswana and South Africa. High level delegations from China have been busy forging trade ties with various African countries and have bee touring countries like Nigeria, Gabon, Sudan, Kenya, Tanzania and Uganda.

On the other hand, exports from Africa to China have also been registering a healthy growth in recent years. South Africa’s exports to China have more than doubled in the last five years. Notable among these exports are raw materials needed to meet the rising demand for China’s manufacturing sector – commodities like coal and gold. Chinese compnaies have also been using African factories to stitch garments using Chinese raw materials and cloth for exports to the United States under the AGOA agreement that allows duty free imports from certian African countries into the United States.

 

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