China in Africa
Appendix II: The Forum on China-Africa Cooperation
[16-18 December 2003]
The second Forum on China-Africa Cooperation (FOCAC) took place against the backdrop of four main issues that currently drive China’s Africa policy:
- Developing a broad front against US or Western hegemonic aspirations;
- Securing new consumer markets for its growing production base;
- Securing new raw material supplies;
- Neutralising Taiwan’s search for international respectability;
In an opening statement at the SOM, Ethiopian State Minister of Trade and Industry Taddese Haile, said "China's cooperation with Africa, particularly in some critical areas can make a real difference in assisting African countries in their earnest fight for transforming their political and socio-economic development," Of much greater significance, Haile, continued, " We consider China as our vital strategic partner. "
The FOCAC Meeting
The FOCAC meeting itself that commenced on from December 15 through December 16, saw six African presidents in attendance. They included Congo-Brazzaville President Sassou-Nguesso, Mozambican President Joaquim Chissano, Sudanese President Al- Bashir, Ugandan President Yoweri Museveni, Zimbabwean President Robert Mugabe and Comoro President Azali.
Other high-level officials from most African states were also in attendance. These included Ethiopian Prime Minister Meles Zenawi, South Africa's then Deputy President Jacob Zuma and Foreign Affairs Minister Nkosazana Dlamini Zuma, Tanzanian Prime Minister Frederick Sumaye and Minister for Foreign Affairs and International Cooperation Jakaya Kikwete and Minister for Industry and Commerce Juma Ngasongwa. Also present at the Forum were 69 African ministers and representatives of international and regional organizations.
The Chinese delegation, underscoring the importance of the forum to China, was led by Premier Wen Jiabao, who made his first visit to Africa since becoming his country's leader. The senior person in the delegation was Beijing's Foreign Minister Li Zhaoxing.
This was the first ministerial conference of the FOCAC to be held on the African continent. The first was held in Beijing in 2000, with nearly 500 attendees, including more than 80 ministers in charge of foreign affairs, international trade and economic cooperation from China and 45 African countries that have diplomatic relations with China.
The FOCAC has been described as a: collective consultation and a new departure in the history of Sino-Africa relations. It was designed, according to Chinese public relations "to be a future-oriented movement in the context of South-South cooperation."
The main agenda of this, the second FOCAC ministerial conference, was to review the implementation of the "Beijing Declaration" and the "Program for China-Africa Cooperation in Economic and Social Development." These documents had been adopted during the first meeting in Beijing, and provided a framework for the establishment of the partnership. They explored initiatives and measures toward Sino-African cooperation, in areas such as human resources development, agriculture, infrastructure development, investment and trade.
As the Forum began, African leaders called for more cooperation with China for the continuing development of the continent under the frame-work for the establishment of the partnership. They explored initiatives and measures toward Sino-African cooperation, in areas such as human resources development, agriculture, infrastructure development, investment and trade. To strengthen and accelerate the decision-making process of the FOCAC mechanism, the Chinese established a Follow-up Committee in December 2001, composed of senior officials from 21 African ministries, commissions and agencies.
As the Forum began, African leaders called for more cooperation with China for the continuing development of the continent under the framework of the Forum, and within the guidelines of the New Partnership of Africa's Development (NEPAD).
In his opening speech, citing the establishment of the African Union and NEP AD as examples, Prime Minister Wen said these are expressions of Africa's collective commitment to placing the continent on a generalized course of peace and development.
The Chinese premier announced that his government had, ahead of schedule, established its debt exemption commitments and cancelled 31 African countries' debt, totalling 10,5 billion yuan (US$1,2 billion). Wen continued to talk about Chinese training programs, saying that in 2003, a further 10 000 young Africans would join the 7,000 now receiving professional and technical training in China.
After the opening of the Forum, the premier announced that Tanzania, Ethiopia, Kenya, Tunisia, Seychelles, Zambia, Zimbabwe and Mauritius would be given the status of "approved destinations for outbound Chinese tourists" or “Approved Destination Status”. This status means that Chinese travel agencies can organize mass visits, as they are already doing with Egypt, South Africa and Morocco, which were approved last year.
There are strings attached with this, however. One is formal and informal pressure from Beijing to have African ADS countries regulate tourism fees - from hotels and meals to safaris and tours - at levels considered bearable by Chinese tourists. As a big part of the market is not state directed, this could result in nefarious attempts to pass legislation violating established rules of market competition. Just after the passing of the Chinese decision in Ethiopia, one large group of PRC tourist operators, headed by businessman Tony Li (of China Golden Bridge Travel Service Corp., Head Office, Beijing, a corporation founded in 1986), did several exploratory trips to Zimbabwe, Tanzania and Kenya, to enquire about the precise prices practised by local entities, and suggested several substantial reductions. This is unlikely to be accepted by privately run tourist spots.
Bigger Chinese trip and booking services, like China International Travel Service Shanghai Corp. Ltd, Peace International Tourism Corporation, Guangdong Overseas, Shantou Tourist General Corp., the China Youth Travel Service or Travel Service Beijing, Hua Du Travel or Xinhua Tours, all are poised for the higher segments of African travel, said to still be in South Africa, Egypt, Mauritius, Morocco and Tunisia.
It was also decided that China and Africa would co-operate in maximising projects already established in NEPAD - for example, the need to revamp extensive infrastructures, or a sound agriculture development plan until 2006 - and so use Beijing's resources to support what was deemed as a rational strategy for development and growth of the whole continent. However, no specific projects were put forward by China to strengthen NEPAD on the continent.
The China Africa Business Conference
Perhaps the most significant event at the FOCAC meeting was the parallel hosting of the where more than 320 entrepreneurs representing Chinese and African companies "China-Africa Business Conference" between December 14 to 16 at the same venue, participated in the conference. The 142 participating Chinese entrepreneurs were from more than 100 companies (see previous lists) while more than 180 business people from 24 African countries attended the conference. The conference was organised by the China Council for the Promotion of International Trade (CCPIT), under a special commission headed by executive Vice-Chairman Yu Ping.
Among speakers on the business forum were Dick Patel, Zambia Commerce Minister, Olive Kiongo, Uganda National Chamber of Commerce and Industry, Manuel da Cruz, Angola Vice-Minister of Trade, Avelino Bonifácio (Cape Verde Minister of Trade). It was announced by the CCPIT officers that PRC banks agreed on making available more credit funds for Chinese companies wanting to invest in Africa, while the main areas of interest were quickly identified:
- Officers from the CCPIT and the China Chamber of International Commerce (CCIC) presented the proposal for the establishment a permanent Sino-Africa Industry and Trade Federation, that could accept as members all continental entities having a proven economic interest in doing so (in principle, it could include "Group of 7" members; see under).
- There was a general compromise to have a pre-selected list of African goods included in a reduced tariff or no tariff area of Chinese import economy.
- Another big goal is the planned Foreign Direct Investment by Chinese firms and the and the state in Africa, valued at $30 billion over the next 5 to 7 years. One third of this amount is said to be for Nigeria. Mustapha Bello, theNigerian head of foreign investment council, will soon address the issue in a high level visit to Beijing and Shanghai.
Chinese officials who attended the trade forum said they have signed 20 trade agreements with eight African countries -Ethiopia, Tanzania, Sudan, Uganda, Rwanda, Cape Verde, Nigeria and Mauritania - worth $68 million, covering the supply of energy, cement, chemicals, pharmaceuticals, textiles, sugar mills and agricultural products. Most of these were clinched before the meeting.
PM Wen Jiabao met separately with senior African leaders present (13 total), and briefed them not only on the FOCAC agenda, but also on political and security issues, including PRC's posture on terrorism and the Taiwanese question.
The ones who had the privilege of hearing Jiabao on more exclusive matters included South African Vice president Jacob Zuma, Mozambique President and AU Chairman Joaquim Chissano, Zimbabwe’s President Robert Mugabe, Congo Brazzaville’s President Sassou Nguesso, Sudan's President Al Beshir, AU Commission Chairman Alpha Konare, Ethiopia PM Meles Zenawi, Sierra Leone Vice President Solomon Berewa, Burundi’s Vice President Alphonse Meie Kadege, Tanzania’s Prime minister Frederick Suraye, Comoron President Azali Assoumani, and Uganda’s President Yoweri Museveni
On the defence and security side, besides promises to increase the present level of PRC peacekeepers in Africa, Beijing also affirmed its willingness and means to work against weapons trafficking, terrorism, money laundering, computer crime, narcotics smuggling, and other forms of organised crime, including shared intelligence work, police training and by discussing the use of armed forces in preventing, deterring or repressing such phenomena.
China’s concern over international terrorism had to do with the activities of the Uighur Muslim separatists in China’s Xinjiang Province fighting for an independent Turkestan “homeland”. Chinese intelligence officials have claimed that these elements are linked into the Al Qaeda network and its affiliated groupings that also reach into Africa.
But most African foreign ministry security officers who heard the Chinese view on terrorism, especially from Sudan, Ethiopia and Nigeria, expressed serious doubts about the reality of the so called "terrorist threat", saying that no documents were provided by China on the levels of activity and routes of possible escape that militants from the Central Asia trouble spot might have been using.
Algeria seemed to be the only country more wiling to take China seriously on the matter, having instructed its security service keep watch over any contacts between the Al Qaeda aligned Salafist terror group in Algeria and Uighur elements. In return, PRC officers announced at security briefings at the Forum that Beijing would help assist in the establishment of a suitable centre for Study and Research on Terrorism in that country.
China promised material support for security initiatives of the African union's Peace and Security Council, and stated that PRC state defence industries would supply top notch non lethal equipment for engineering, de-mining, transportation, patrol, air sea and land reconnaissance, emergency relief, environmental protection and other non lethal security tasks and duties.
- A major stress was placed on the training and education of new generations of able Africans, ready to use China's skills in development. This would be done by Beijing’s African Human Resources Development Fund, created in 2002. The target is the training of 10 000 African professionals in Chinese schools or by PRC instructors, over the next three years;
- The PRC also wants to increase the present level of medical presence in Africa, from current 1 100 in 40 countries to around 2 000 in virtually all the continent. Chinese Deputy Prime Minister Wu Yi is presiding over the commission studying the financial structure and offsets for this ambitious plan. HIV, Tuberculosis and malaria are seen as the main diseases needing PRC specialised help, at the level of prevention, treatment and specialised drug and equipment supply
- A Sino-Africa Youth Festival was planned for later 2004, in mainland China, under the designation "Beijing meeting". In principle, the PRC would invite and pay for around 15 African arts groups to be present and perform. There will also be a month of "Chinese Culture Trip to Africa", with travelling arts and performance groups, exhibitions, seminars and special events.
- The PRC has followed up on the FOCAC meeting with a reception in Beijing on 12 January that was intended to consolidate and advance the FOCAC agenda. The event was jointly sponsored by the Chinese Association for Friendship with Foreign Countries (CPAFFC) and the Chinese-African People’s Friendship Association (CAPFA). Beijing is expected to make greater use of CPAFFC and CAPFA in advancing relations with African countries. These two organisations will be used to broaden links with selected African countries in an effort to consolidate diplomatic relations and perhaps more importantly to consolidate links in non-governmental areas such as with civil society/NGOs. The organisations are expected to specifically target selected African ambassadors in Beijing in an attempt to more effectively use them as messengers to the home government.
Beijing has also indicated its intention to provide African countries with “unconditional assistance within its capacity.” However, the historical record shows that the PRC has always expected something in return for assistance. Moreover, Beijing is increasingly insisting that it is not prepared to provide aid to African countries as it did in the past. Instead, Beijing is insisting on a relationship based primarily on trade and investment. Diplomatic sources point out that China has been frustrated by African counties misuse of aid and failure to repay loans. Consequently, Beijing decided to cancel part of the debt owed them by African countries (money which they did not expect to receive in any event) in exchange for the extraction of promises of political support from the debter nations. The drive for a more normal commercial relationship with African countries is expected tosignificantly benefit China, given the PRC’s low labour costs and increasingly effectiveeconomy.
- 1. Introduction
- 2. Africa in the Context of China's Resource Acquisition Requrements
- 3. The Origins of China's New Africa Policy
- 4. The Role of FOCAC
- 5. China's New Resource Acquistion Business Model
- 6. The Role of Chinese Institutions in the Acquisition of Business Intelligence
- 7. China's Energy Footprint in Africa
- 8. China's Mining Footprint in Africa
- 9. China's Telecommunications Footprint in Africa
- 10. China's Infrastructure Footprint in Africa
- 11. The Role of China's Financial Institutions
- 12. Implications for Japanese Investors
- Annexure I: The Focac Fuc Structure
- Appendix II: The Forum on China-Africa Cooperation
- Annexure III: Ministry of Commerce
- Annexure IV:Profile Chen Yuan and Chi Janxin