Chinese president’s Africa visit to grow trade flows

Bloomberg

Trade and investment flows between China and Africa will gain momentum this year as President Xi Jinping visits several nations on the continent during his first overseas trip, according to Standard Chartered.

Xi, who took over from Hu Jintao last week, will visit Russia, Tanzania, South Africa and the Republic of Congo this month, according to the Xinhua News Agency.

Rising Chinese investments in Africa would continue, Stephen Priestley, the bank’s head of origination and client coverage for the continent, said in Beijing on Monday.

Trade between China and Africa may have risen to a record last year after growing 20 percent to 163.9 billion yuan (R239.9bn) through October, according to China’s Ministry of Commerce. Forecasts of a more stable economic environment would help drive trade and investment, Priestley said.

“There are fewer disruptions within Africa than there were in the last year and the year before,” he said. “We just saw an election in Kenya, we just had an election in Ghana and there was a transfer of power and there’s no disruption to the economy. It’s a stable growth pattern.”

Standard Chartered, with operations in 16 African countries, plans to invest $100 million (R919m) over the next three years, opening 110 branches on the continent and recruiting 950 staff. Revenue from Africa made up more than 8 percent of income last year, according to the London-based bank.

Chinese investment in Africa totalled almost $20bn at the end of last year, creating jobs, tax revenue and training, Shen Danyang, the spokesman for China’s commerce ministry, said in Beijing yesterday.

“China has built substantial goodwill in Africa over the years,” Priestley said. “It now needs to make sure it balances that, making sure that certain companies ensure there are skills transferred and that they don’t replace the labour in these countries.”

Nigeria’s central bank governor, Lamido Sanusi, warned in a Financial Times article earlier this month that Africa must shake off its romantic view of China and accept that it was a competitor as much as a partner. “China is a major contributor to the deindustrialisation of Africa and thus African underdevelopment,” Sanusi wrote. pages 18, 25