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China-Africa Cooperation: Prospects and Priorities following the Johannesburg Summit on FOCAC


China-Africa Cooperation: Prospects and Priorities following the Johannesburg Summit on FOCAC

 

Lecture delivered by Ambassador Dolana Msimang

IWAASChinese Academy of Social Sciences,

Beijing - 1 November 2016

 

Excellency Ambassador Liu Guijin, former Chinese Ambassador to South Africa and current President of the Chinese Society of Asian–African Studies

Professor Zhang Hongming, Deputy Director of the Institute of West Asian and African Studies of  the Chinese Academy of Social Sciences

Professor Yang Lihua, Director of the Centre of South African Studies,  the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences

 

Members of the Institute of West Asian and African Studies and the Chinese Academy of Social Sciences (CASS)

 

Ladies and Gentlemen

 

I am deeply honored by the invitation to visit the Chinese Academy for Social Sciences and the privilege to share my thoughts on the prospects and priorities for the China-Africa Cooperation, with esteemed and knowledgeable academics of your caliber. It is my distinct pleasure, to engage and exchange views with you on this very important and relevant subject.

 

While nations remain seized with the many, in some cases protracted, challenges, including conflicts, natural disasters, social unrest, the global economic slowdown, and the historic changes in world politics, there are also significant developments that give us great hope for the future. The growing Africa-China relationship is one such development. This relationship continues to draw a great deal of attention, and rightfully so as it has the potential to remap the current and future configuration of global political and economic affairs in a manner that could see Africa rise to unprecedented levels if the current partnership is harnessed properly.

 

Ladies and Gentlemen,

China, a country with more than 1.3 billion people and Africa a Continent with approximately a similar population size, but consisting of 54 sovereign countries. It is a dynamic relationship where both sides continuously strive for win-win cooperation in pursuit of sustainable development in both sides. The depth of this relationship has caught the interest and attention of many countries and organizations throughout the world.

 

I, therefore, believe that as we engage on this topic today, we should begin by looking at the context within which our engagement takes place. In this way, it will then become clearer why our relationship has taken the direction and pace it has within a short space of time.

 

Let us first start by examining Africa recent history and the economic conditions prevailing in the different countries and sub-regions in Africa, as well as in the Continent as a whole, as they are the crucial base on which the Africa-China partnership rests.

 

Ladies and Gentlemen,

At the beginning of this millennium we declared this century to be an African century. This ushered in a new sense of hope and a renewed search for a new beginning for Africa. Dubbed the African renaissance, it was a search for a continent characterized by democracy, peace and stability, sustainable development and a better life for all its people. Today it continues to represent a collective vision of African unity and solidarity, African development and renewal and an end to the marginalization of our continent in development processes and world affairs

 

Sixteen years later Africa still remains the least developed continent in the world, both at the level of physical infrastructural development and science and technology.

However we are very confident that with commitment and determination, combined with this dynamic partnership with China, the continent has a huge potential to move out of its perpetual condition of underdevelopment and poverty.

Our confidence is derived from the fact that

  1. China has been very successful in the implementation of its own development strategy and could play a positive role in Africa’s own development. China has reached a level of industrialisation where it has well established advanced industries and technology with surplus capacity. Furthermore, it is now also in a position where it can shift advanced production capacity to different parts of the world. On the consumption side, as the second largest economy in the world, it has reached a level where it can also make a meaningful contribution to invest in manufacturing of and take up more value-added exports from Africa.
  2. Africa is rich in natural resources and accounts for 30% of the total mineral reserves on earth, including 40% of world's gold and 60% of cobalt, making Africa, "a strategic producer".
  3. Africa is the Continent with the fastest-growing population in the world. From 2000 to 2015, population numbers increased by more than 370 million from 814 million to almost 1.3 billion. According to United Nations projections, medium scenario, the population is expected to rise to almost 1.7 billion in 2030 and almost 2.5 billion in 2050. Africa’s share of the world population is predicted to increase from currently around 16% to almost 20% in 2030 and above 25% in 2050.

Therefore in the coming decades, Africa will have the most favourable demographics in the world, in terms of the development of people at working ages. This absolute and relative increase of potential labour supply opens a window to boost Africa’s annual growth of GDP per capita by up to half a percentage point over the next 15 years. It should however be stressed that positive labour supply effect on growth will only materialise if enough jobs are created.

Africa’s future demographics thus offer opportunities but also create challenges. In particular, the growing labour force may lack the necessary skills affecting the value of its human capital.

  1. More importantly there is political will to turn the situation around for the better, and much happened already to demonstrate this.

The establishment of the African Union in June 2002 was the beginning of Africa’s strife to forge ahead with her renewal. The African Union, as well as its organs such as the Peace and Security Council, Pan-African Parliament and programs such as the New Partnership for Africa's Development (NEPAD), are all instruments designed to enable the continent to achieve the renewal goals.

A lot of work has since been done to achieve these goals and create the right environment for sustainable development, peace and stability and many efforts have gone into conflict resolution and management.

Africa's commitment to democracy and human rights is evidenced by the increase in the number of democratically elected governments and peaceful and voluntary changes in power since the early 1990s. Africa now has more democratically elected governments than at any other stage of her post-independence history.

On the economic front, many African countries have now developed much more stable macroeconomic policies as well as more suitable trade regimes and the result has been relative improvement in Africa's economic performance.

Africa has achieved impressive economic growth over the past 15 years.

It is interesting to note that while average growth of African economies weakened slightly in 2015, its overall growth however remained higher than world growth. Ironically lower oil and food prices and growing construction investment, both public and private, became important drivers of growth. Several African countries such as Côte d’Ivoire, Djibouti, Ethiopia, Mozambique, Rwanda and Tanzania were among the fastest-growing countries in the world last year with growth between 6% and around 10%.

 

In contrast, exports remained mostly sluggish and often declined due to weak global demand. Thus, Africa’s growth was again supported and sustained to a large extent by domestic factors, which helped to cope with headwinds from the global economy. Given Africa’s vulnerability to external shocks, promotion of regional trade and integration as well as diversification of economies has assumed even greater importance.

 

It is also very important to highlight that ‘on the supply side’; many African countries have further improved conditions for doing business. Among the 51 African countries evaluated in the World Bank’s Doing Business report of 2016, 23 improved their ranking in 2015. Conditions for doing business improved most in Kenya, Uganda, Seychelles and Mauritania as measured by improved rankings.

 

In 2015, agriculture supported growth in countries where weather conditions remained favourable and investment had increased productivity. However, several countries experienced a decline in growth notably Ethiopia, Malawi, Namibia, South Africa, Zambia and Zimbabwe due to either droughts or floods. This sector remains vulnerable to weather conditions and volatile prices of agricultural products. In resource-rich countries, growth declined as lower commodity prices strained government budgets and investment.

 

Production in extractive industries remained unchanged or increased slightly in some countries like (Nigeria and Zambia) despite lower commodity prices while in others it declined (Botswana, Equatorial Guinea, Gabon, Guinea, Sierra Leone and South Africa). Manufacturing activity improved in a few countries (Ethiopia, Kenya, Rwanda and South Africa), but was often constrained by weak export demand and sometimes power shortages.

 

The construction sector continued to boost growth in many countries, often driven by public infrastructure programmes, but also by private investment including in housing. The service sector also remained an important driver of growth in Africa.

Both traditional services such as transport, trade, real estate, public and financial services and new information and telecommunication technologies remain important drivers for productivity and growth.

 

Tourism is also an important and growing service sector in Africa. However, according to the World Tourism Organization (UNWTO, 2016), international tourist arrivals in Africa declined in 2015 by 3% to 53 million. In North Africa, arrivals declined by 8% and in sub-Saharan Africa by 1%, although the latter returned to positive growth in the second half of the year. In some countries, tourism was adversely affected by the outbreak of Ebola, terrorism and security problems in some parts of East and West Africa region as well as the Maghreb.

 

Ladies and gentlemen,

Africa is aware of the potential it has and the opportunities that lie before it within a changing global context. And it was not by chance that the Continent’s leadership made a clarion call for action in May 2013, to all segments of African society to work together for the attainment of the Pan African Vision of an integrated, prosperous and peaceful Africa, driven by its own citizens, representing a dynamic force in the international arena.

 

Africa’s leadership rededicated itself to the Continent’s accelerated development and technological progress. They laid down a vision and ideals to serve as pillars for the Continent in the foreseeable future, which Agenda 2063 will translate into concrete objectives, milestones, goals, targets and actions.

 

Africa recognizes that globalization and the information technology revolution have provided unprecedented opportunities for countries and regions with the right policies to make significant advances and lift huge sections of populations out of poverty, improve incomes and catalyze economic and social transformations.

 

Africa has grown and developed in recent years by improving the regional business environment, good governance, sound macroeconomic management, increased investment in infrastructure and growing trade with emerging economies.

The vision espoused by African leaders as reflected in the AU’s Africa Agenda 2063 Framework Document adopted in January 2015 is that of a continent that in fifty years would rise to be a world leader with inclusive economic development, democratic governance and a humane and just social order. 

This vision will surely need smart partnerships like the China-Africa Cooperation to ensure that Africa does not only catch up but thrives in the 21st century. It will involve:

§ Transforming from being an exporter of raw materials with a declining manufacturing sector, to become a major food exporter, a global manufacturing hub, a knowledge centre, beneficiating our natural resources and agricultural products as drivers to industrialization. 

§ Diversifying of economies - from mining to finance, food and beverages, hospitality and tourism, pharmaceuticals, fashion, fisheries and ICT are driving balance between market forces

§ Employing Massive irrigation schemes to harness the waters of the continent’s huge river systems to release the continent’s untapped agricultural potential.  

§ Finding qualities of various grains – that will survive low rainfalls and those that can thrive in wet weather; resulting in bumper harvests throughout the 4 seasons and Combating pests that threaten crops without undermining delicate ecological systems. 

§ Countering the effects of climate change by promoting the Green and Blue economies using hydro, solar, wind, geothermal energy

§ Fostering peace and reduce conflict by investing in our people

§ Eradicate major diseases and provide access to health services, good nutrition, energy and shelter

 

Ladies and Gentlemen,

These are some of the priority projects that Africa seeks to realize within the first ten years of the implementation phase of Agenda 2063. Through these projects, we hope to work through our national governments and regional economic communities to realize as a Continent sustainable and inclusive economic growth, human capital development, agriculture/value addition and agro-businesses development, employment generation, Infrastructural development, science, technology, innovation and maanufacturing-based industrialization.

The relationship between Africa and China has evolved over the years while following a positive trend. I am encouraged to note that both sides continue to display commitment and determination in progressing together on the basis of win-win cooperation for common development. Our cooperation over the past 15 years through the FOCAC mechanism has seen us reap mutual benefits that have given real reason and confidence to forge even stronger ties by elevating the Africa-China relationship to a comprehensive strategic and cooperative partnership.

 

Through FOCAC and other bilateral arrangements, we continue to work towards addressing some of the critical challenges that face Africa with the common understanding that the partnership targeting the identified priorities would lead to win-win results.

 

During the FOCAC Summit held in South Africa in December 2015, President Xi Jinping announced ten major cooperation plans with Africa in the next three years, which dovetail with Africa’s own priorities as outlined in the First Ten-Year Plan of Implementation of Agenda 2063.

 

The ten cooperation plans are crucial and relevant for Africa-China cooperation. 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; are in fact essential elements of Africa’s development at national, regional and continental level, fitting perfectly with the African Union’s Agenda 2063.

 

With this configuration in place all that needs to happen is for Africa and China to continue to pursue win-win solutions and ensure mutually beneficial collaborations.

 

I am happy to share with you my observation on the changing nature of our cooperation with China. Increasingly, indications are that Chinese business is gradually taking a lead independent of Government to invest in Africa. This is a good sign that tells us that at a Government-to-Government level, we have done our part in laying solid foundations for our enterprises to establish sustainable and mutually profitable linkages. In this way, Africans are playing a critical role in shaping the nature of their relationship with their Chinese counterparts, while the latter is also growing its understanding and confidence of the environment in Africa.

 

Ladies and Gentlemen,

Government support to this partnership remains critical, however, it should always be directed at ensuring equitable and win-win outcomes.

 

Now let us turn our attention to real life examples of the blossoming Africa-China partnership that serves as a shining example for other African countries:

 

China’s economic cooperation with Ethiopia has expanded rapidly over the past decade. FDI from China to Ethiopia increased from virtually zero in 2004 to an annual amount of US$58.5 million in 2010.

 

In October 2016 Ethiopia and Djibouti launched the first fully electrified cross-border railway line in Africa; a project valued at US$4 billion. The railway opens up a previously landlocked country and connects it to the Red Sea through Djibouti. Beneficiaries of this project are not only Ethiopia, Djibouti and China but also the region at large including South Sudan. It could even be argued that with this move East Africa and the rest of the African Continent now have a link that could tap into the Chinese Maritime Silk Road initiative that is expected to pass through the Red Sea.

 

The much anticipated Mombasa to Nairobi railway which has been said will extend eventually to Uganda, Rwanda, Burundi and South Sudan completes the critical picture that speaks to the aspirations tabled in the form of flagship projects that form part of the First Ten-Year Implementation Plan of Agenda 2063. Regional connectivity through railway networks brings together a very economically active region in Africa. The socio-economic implications for the region are expected to contribute towards sustainable and inclusive economic growth of the region.

 

Ladies and Gentlemen,

Given the fragmentation and relatively small size of African markets, a Continent-wide common market offers a unique opportunity to invest in cross-border infrastructure, to spur regional integration and to boost growth and employment creation. Most Africans live in countries where domestic markets are too small and fragmented to achieve the economies of scale necessary to compete internationally. Closer integration is therefore crucial for the Continent. Growth is a key aim for each country and so is the desire to narrow divergences in income, unemployment and other social outcomes.

 

In practice, China has effectively supported the mechanism of consolidation and development of collective security in Africa by supporting the AU position in the security affairs, by providing financial assistance to the AU, by preparing the mechanism of the strategic dialogue between China and the African Union, and by strengthening cooperation with sub-regional organizations.

Going forward, especially as Africa advances its regional and continental economic integration agenda through related policies and programs, lessons could be drawn from China’s One Belt One Road initiative in as far as it relates to security cooperation within the context of the initiative. In order for the OBOR to succeed, it would be imperative for the region through which the belt traverses, enjoys peace, stability and security. This will in turn require increased cooperation, coordination and consultation amongst involved parties on issues of geo-strategic importance that have a bearing on security and stability of the entire region and the continent at large.

 

Ladies and Gentlemen,

The opportunities for Africa-China cooperation are bountiful and go beyond the economy, trade and investment on which I focused today. We know that economic and political cooperation can be enriched and strengthened when peoples understand and appreciate each other. When they start talking to each other and stand in each other’s shoes walking a few miles together. That is why I deeply believe that in order for Africa and China to remain focused on realising the sustainable self-development for Africa that President Xi Jinping mentioned in his speech on 4 December 2015,it is vital for us to promote people-to-people exchanges. That includes cultural exchanges, scholarships, academic and think tank exchanges, sporting events, volunteer services, women and youth dialogues, friendship associations, media exchanges and partnerships between ordinary people going beyond government and business.

 

From an investment point of view, we are of the view that the slowing down in the Chinese economy will not affect the appetite of Chinese investors to go abroad. On the contrary, it will increase their desire and give greater impetus the investment drive and China’s “Go Global” Strategy. China’s outward focus is also evidenced by its support for the Asian Infrastructure Development Bank (AIIB), the BRICS New Development Bank (NDB) and the centrality of the One Belt, One Road policy in its international affairs strategy.

Its investments overseas will also assist China to address some of its enormous industrial overcapacity, ease the entry of Chinese goods into regional markets, and provide capital for regional infrastructure development to improve overall trade and relations in the region and beyond. We are confident therefore that China will continue to play a pivotal role in the industrialisation and reintegration of Africa.

Our future, like our past, is strategically and fundamentally linked. Our collective effort and cooperation will result in mutually beneficial outcomes, benefiting current and future generations on the Continent and in China.

In conclusion, allow me to quote from President Jacob Zuma’s closing remarks at the Johannesburg Summit on 5 December 2016:

 

“The relationship between Africa and China is not new. It is a long-standing historic relationship that is based on a history of solidarity and the support we received from China as we fought colonialism and apartheid on the African Continent decades ago. China was there when we needed help most and we will never forget that solidarity and comradeship… Africa and China are together a fraternal community with a shared and prosperous future. Africa and China want to prosper together.”

 

Thank you


Copyright: Institute of West-Asian and African Studies, CASS

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