While some are sceptical as to whether China-Africa trade benefits Africa as much as China, those in the know say that much depends on whether African countries and businesses position themselves to leverage the strategic opportunities that have opened up as a result of China's involvement in the African continent.
These include opportunities for bilateral trade in sectors such as infrastructure and logistics, construction, agribusiness, human-resource development, mining and energy. China has become the world's top manufacturer surpassing the US, with a manufacturing industry that produces a range of sophisticated equipment beneficial to Africa's development. Africa on the other hand has strategic resources such as oil that China needs to meets its energy demands. For example, China is already investing in Angola and has begun making significant contributions to the country's agriculture infrastructure, while Angola is a major supplier of oil to China.
The importance of the bilateral relationship between China and Africa was emphasised at the World Economic Forum 2011, held in Cape Town in May, where President Jacob Zuma said during the opening session, "Africa should interact with China in a way that benefits both countries." This statement recognises the fact that Africa has much to gain from forming economic ties with countries such as China in order to achieve economic growth targets.
Trade statistics with China reflect the potential that exists for expanding the commercial relationship. Trade between South Africa and China has grown by more than R100-billion (US $13.6 billion) since 1998, when full diplomatic relations were established. Total trade amounted to R119.7 billion ($16.3-billion) at the end of 2009, growing by 2% from 2008 to a total of R118 billion ($16-billion).
China's involvement in the African economy has also made it possible for African countries to diversify their trading partners, thereby reducing their vulnerability to primary commodity price shocks, and increasing competition among importers of African commodities. This has enabled South Africa and other African countries to weather the 2008 financial crisis with more resilience than if trade depended on Europe and the US.
Africa is currently experiencing economic recovery with growth increasing from 1.7% in 2009 to 4.7% in 2010. An October/ November 2010 report by Stats SA indicates that exports from South Africa to Asia increased by R6.6 billion to R21.5 billion, in comparison to Europe where exports increased by R1.1 billion to R15.0 billion and the US where exports increased by R0.6 billion to R6.4 billion. If African countries had continued their reliance on exports to developed countries such as the US and Europe, economic recovery would have been uncertain as these countries are experiencing a slow rate of economic recovery.
With numerous opportunities for growth and expansion of trade between local businesses and their Chinese counterparts, the China Africa Business Forum is the ideal meeting to explore economic and trade prospects and surrounding issues.
For more information, email Candice Scorer on moc.az.azneyis@ecidnac.
