Economic and Trade Relations between China and Africa Anchored on Mutual Benefit and Win-Win Cooperation
(Address by Ambassador Liu Guijin of the People's Republic of China to
South Africa at the African Business Leaders Forum 2006)
October 19, 2006
It indeed gives me a great pleasure to attend the Fourth Annual African Business Leaders Forum 2006. First of all, I would like to express my heartfelt thanks to the Business-in-Africa Magazine for its kind invitation which gives me a valuable opportunity to brief you on the trade and economic relations between China and Africa and to have face-to-face interaction with business leaders from both the public and private sectors in Africa. My presentation consists of two parts: 1. China's Peaceful Development Strategy; 2. Basic Principles of China's Trade and Economic Cooperation with Africa.
Ⅰ. China's Peaceful Development Strategy
Since the policies of reform and opening-up were introduced at the end of 1970s, China has successfully embarked on a road of peaceful development in light of its unique national conditions and compatible with characteristics of the times. By opting for such a road, China has been unswervingly striving for a peaceful international environment to develop itself, and promoting sustained world peace and common prosperity through its own development. It is a serious choice and solemn promise made by the Chinese government and the Chinese people.
China's road of peaceful development is originated from its culture which has been characterized by fervent pursuit of peace and harmony. As you might know, six hundred years ago, Zheng He, the famous Chinese navigator of the Ming Dynasty, led the then largest fleet in the world and made seven voyages to the "Western Seas", reaching more than 30 countries and regions in Asia and Africa. According to calculations by the renowned economic historian Angus Maddison, China produced a quarter of total world output 2,000 years ago and almost the same proportion 1,000 years ago. Around 1400, which happened to witness a middle-aged Zheng He who lived from 1371 to 1435, China's national economic output was estimated to be equal to that of the whole Europe. As you can see from above, China could be regarded as a superpower for a quite long period of time in history, particularly during Zheng He's time. However, What Zheng He took to the places he visited were tea, chinaware, silk and technology. He did not occupy an inch of foreign land, nor did he take a single slave. What he brought to the outside world was peace and civilization. This fully reflects the good faith of the ancient Chinese people in strengthening exchanges with relevant countries and their people. This peace-loving culture has taken deep root in the minds and hearts of the Chinese people of all generations.
Based on the present reality, China's development has not only benefited the 1.3 billion Chinese people, but also created large markets and development opportunities for countries throughout the world. China has always been sticking to developing its economic and trade relations with other countries on the basis of equality, mutual benefit, reciprocity and win-win cooperation. Statistics released by the World Bank show that China's economic growth contributed on an annual average of 13 percent to world economic growth from 2000 to 2005. In 2004, the world economy recorded the fastest growth in 30 years, while China's economy grew by 9.5 percent and became a key driving force behind it. China also shoulders broad international obligations, plays a responsible and constructive role in settlement of international and regional problems, and seeks common development with a vast number of developing countries within the South-South cooperation framework.
It is therefore clear that China's development does not pose a threat to anyone; instead, it can only bring more opportunities for the rest of the world.
Ⅱ. Basic Principles of China's Trade and
Economic Cooperation with Africa
1. China has always been a strong supporter of Africa's Economic and Social development.
This year marks the 50th anniversary of the inauguration of diplomatic relations between China and African countries. Over these years, China has not only rendered its firm support to the African people in their struggle for national sovereignty and dignity, but also endeavored to provide sincere economic assistance to the best of its ability to African countries. Since 1956, China has completed some 900 projects of economic and social development in Africa, provided scholarships for 18,000 students from 50 African countries to study in China and sent 16,000 medical personnel to 47 African countries, who have treated more than 240 million patients. Up to now, there are over 3000 Chinese forces participating in the UN peacekeeping operations in Africa. China also actively promotes trade with Africa, helps ease its debt burden, supports regional cooperation, which contributes a lot to Africa's self-development.
To keep abreast of the changing situation and the suggestion of African countries, China launched Forum on China-Africa Cooperation 6 years ago in Beijing. This forum has become an important platform for dialogue, consultation, advancing mutual understanding and identifying priorities in concrete economic and social cooperation. The Chinese government has set up the African Human Resources Development Fund and made positive contributions to enhance Africa's capacity building. Between 200-2003 only, we completed training courses for about 7000 government officials and technical personnel from African countries in areas such as agriculture, health, education, science and technology. At the 2nd FOCAC Ministerial Conference in Addis Ababa, our government made another commitment to run 300 training courses for some 10,000 people from Africa. At the beginning of next month, the Summit and 3rd Ministerial Conference of FOCAC will be held in Beijing and more concrete measures to expand China's cooperation with Africa will be announced.
2. China is committed to expanding the Sino-African trade and economic relations on the basis of mutual benefit and win-win cooperation.
In the recent years, the trade volume between China and Africa has surged rapidly. In 2005, it hit US$39.8 billion, with China's import from Africa totaling US$21.1 billion, more than its export to Africa. According to a study by the World Bank released during its annual conference in Singapore last month, in the years from 1999 to 2004, African exports to China grew 48 percent each year, fuelling the economic growth of many resources-rich African countries. On the other hand, by importing inexpensive but good-quality products from China, the African countries reduced their import expenditure and inflation pressure while satisfying the demands and enhancing the welfare of their consumers.
While gratified to see the fast growth of China-Africa bilateral trade, we recognize that due to structural constraints and other reasons, there are still some undesirable aspects needed to be further addressed.
Firstly, the share of the bilateral trade in the total foreign trade volume of each side remains relatively small. For example, the trade volume between China and Africa was less than USD 40 billion in 2005, accounting for only 2.6% of China's total foreign trade volume, even less than half of the trade volume between China and South Korea.
Secondly, China's exports to Africa are mainly manufactured goods ranging from machinery, electronics, textile and clothes to hi-tech products, while imports from Africa are mainly crude oil, iron ore, cotton, diamond and other raw materials and primary goods. For those African countries that do not have much oil or raw materials to export, trade with China is less mutually complementary, which result in the rise of their trade deficits.
Thirdly, Labor-intensive industry still plays a major role in both Chinese and African economies. The similarity leads to competition in certain fields between China and Africa, such as textile and apparel industry. Some African countries complain that large influx of cheap Chinese textile products, clothes and shoes have caused unemployment and closedown of local factories. It also creates intense competition for African textile export in third market.
However, Chinese government does not turn a blind eye to these outstanding issues, and has taken multi-pronged measures to address the concerns of the African countries, such as offering zero-tariff treatment to the LDCs in Africa for their exports to China, strengthening cooperation with African countries in the field of human resources development, increasing aid and debt relief, encouraging capable Chinese enterprises to expand their investment in Africa, and transferring technologies well-suited for local conditions to African countries. One of the most recent example is an Agreement reached between the Chinese and South African governments on China's voluntary restraint on its textile and clothes exports to South Africa, with the aim to help the local industry enhance its competitiveness, which again demonstrates the good will from the Chinese side to promote win-win economic cooperation between China and Africa.
To sum up, China's road of peaceful development is absolutely different from the model of Western colonialists in history. We are pursuing a harmonious world of sustainable development and common prosperity and attach great importance to the Sino-African Strategic Partnership. Guided by the principle of sincerity, friendship, equality, mutual benefit and win-win cooperation, the Chinese side is ready to work closely with the African countries to promote the bilateral trade and economic ties to a new height.