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Monday, November 06, 2006

China-Africa Summit

48 out of the 53 heads of state in Africa paticipated China-Africa Forum summit in this month. This simply show the tight connection between China and African countries and China's popularity among African leaders and people.

China began to assist African countries since 1960s. China built hospitals, stadiums, railroads and other infrostructure projects, sent agricultural and medical export teams to this area that was colonized and almost abandoned by the west world. China's assistance was based on political or ideological reasons. But today, the conomical reasons are more important.

According to the World Bank, China is poised to become the continent’s biggest lender, having pledged more than $8bn this year alone.

Almost every country is getting its share. Ghana said yesterday that it was close to finalising a $600m deal for a 400-megawatt hydroelectric dam. Gabon recently signed a $3bn iron ore deal with a Chinese consortium, which will help to construct a railway and container port. Last week Zambia was promised investment of $200m for a smelter to produce 150,000 tonnes of copper. Mozambique has $2.6bn for a hydroelectric dam. Since the start of the year Egypt has seen its trade with China surge by 47.6% to reach nearly $2bn. Chinese investors and state agencies have spent billions on road-building in Kenya, a hydroelectric dam in Ghana and a mobile phone network in Ethiopia.

The biggest deals have been energy-related. Squeezed out of much of the Middle East by the United States, China now gets a third of its oil from Africa. The main suppliers have reaped the rewards. Angola has a $3bn line of credit from China. Nigeria recently sold a stake in an oil and gas field for $2.3bn - China’s largest overseas acquisition yet. More deals are on the way. This weekend’s summit is expected to wrap up with a new package of aid and trade.

But China is not just buying resources, it is selling a model of development. While the west focuses on political freedoms and universal rights, Beijing says the priority should be on improving living standards and national independence. The superiority of this approach, it argues, has been proved by success in lifting hundreds of millions of people out of poverty.Source

China-Africa trade has been on fast track.
Last year, trade between China and Africa totaled $39.8 billion, up more than one-third from the year before. Unlike the West, China applies no import fees on products from 28 African countries.Source

The projected China-Africa trade will across US$50 billion this year and will be doubled to more than US$100 billion in 2010.

China has cancelled 10.9 billion yuan ($1.4 billion) worth of African debts. US$3 billion in preferential loans and US$2 billion in preferential buyer's credits African countries were anounced during the summit, and the aid to Africa will be doubled by 2009.

US$1.9 billion investment deals were signed during the summit. It included a US$938 million aluminum plant in Egypt, US$300 million highway renovation in Nigeria, US$30 million telecommunication project in Ghana, US$60 million textile business in Sudan, US$200 million copper project in Zambia, US$55 million cement factory in Cape Verde and a mining contract worth US$230 million with South Africa.

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