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2015 Business Review XII: China-Africa Trade and Economic Cooperation Starts

In 2015, against the backdrop of the weak recovery of the global economy, the trade investment continued to be low and the bulk commodities operated at a low price, the China-Africa trade and economic relationship resisted the downward pressure caused by the changes of the external environment and started a new journey of the comprehensive strategic cooperation under the guide and promotion of the China-Africa Cooperation Forum mechanism.

China-Africa Cooperation Forum re-set the cooperative model. 2015 marks the 15th anniversary of the establishment of the China-Africa Cooperation Forum. The Johannesburg Summit of the China-Africa Cooperation Forum and the 6th Ministerial Conference were successfully held in South Africa in December. At the opening ceremony of the Summit, President Xi Jinping, on behalf of the Chinese government, announced that efforts would be made to improve the new China-Africa Strategic Partnership to a comprehensive strategic partnership of cooperation and to jointly implement the 鈥渢en cooperation plans鈥with Africa in fields such as industrialization, agricultural modernization, infrastructure, finance, green development, trade and investment facilitation, poverty reduction and people鈥檚 benefiting, public health, humanity, peace and security. These won high praise and warm response from the broad African countries and even the international society, opened a new blueprint for the China-Africa practical cooperation, stimulated the new vitality of the China-Africa community of common destiny and cast another important milestone in the history of the China-Africa relationship and China-Africa trade and economic cooperation.

The high-level reciprocal visits further motivated the cooperation. In 2015, President Xi Jinping visited Zimbabwe and South Africa and met with leaders of 13 countries on multi-lateral occasions. Chinese leaders such as Vice-Chairman Zhang Ping and State Councilor Yang Jiechi respectively visited 6 countries such as Chad and Algeria. Leaders of 13 countries such as Angola, Sudan and Congo visited China with the Chairman of the African Union Committee. Leaders of 10 countries such as South Africa, Egypt, and Ethiopia came to China to attend relevant activities. By these visits, China and Africa further consolidated the political mutual trusts, enhanced the traditional friendship, docked the development strategy, deepened the mutual beneficial cooperation and injected strong power into the comprehensive upgrading of the China-Africa trade and economic cooperation.

The inter-governmental cooperation mechanism assisted the upgrading of cooperation. In 2015, China held the new trade and economic joint (mixed) committee with 10 countries and ECOWAS such as Zambia and Cameroon. The medium-term appraisal meeting of China-South Africa joint working group and the first meeting of China-Angola trade and economic cooperation guidance committee were held to jointly promote the significant issues in the bilateral trade and economic cooperation. MOFCOM also established the capacity cooperation mechanism under the system of the China-Algeria bilateral trade and economic joint committee. This intends to jointly promote China and Egypt to sign the intergovernmental framework of the capacity cooperation with the National Development and Reform Committee and to set up a new platform for the China-Africa capacity cooperation.

The export to Africa realized contrarian growth. Affected by the phased declining price of the global bulk commodities, the trade volume between China and Africa was US$147.6 billion in January-October 2015, with a decrease of 18% year on year, but the amount of exports from China to Africa showed a contrarian soar, reaching US$89.9 billion, with an increase of 5%, 7 percentage points higher than the general growth of the export in the same period. The mechanical and electrical products became an important driving force of China鈥檚 export to Africa. Meanwhile, the products of the mineral energy resources and the distinctive agricultural products imported from Africa didn鈥檛 decline in quantitative terms and some products even increased. Thus it can be concluded that the trade complementarity between China and Africa was continuously strengthened, the structure was increasingly optimized and the development in the future enjoyed a great potential.

The investment to Africa accumulated the development stamina. In January-October 2015, the direct non-financial investment flow in the African countries was US$1.9 billion, down 40% compared with the same period last year. Although the investment growth was slow to some extent, many major projects invested in Africa obtained positive progress. For example, the African heavy truck project and the Ghana gas power plant project invested by the Chinese enterprises in the second phase were started successively in April, with a total investment scale of US$300 million and US$600 million respectively. The light industrial park project invested by the Chinese enterprises in Ethiopia and the expanded area project of the Suez trade and economic cooperation zone invested by the Chinese enterprises in Egypt were steadily promoted. Driven by these significant investment projects, the China-Africa investment cooperation is rapidly gaining momentum and will be expected to regain in the future and reach a new stage.

The contract project maintained a steady growth. In January-October 2015, the contract value of contract projects newly signed by China in the African countries reached US$55.1 billion, with an increase of 5% year on year, and the completed turnover reached US$41.6 billion, with an increase of 2%, accounting for one third of the total turnover of the foreign contract projects. The cross-national and cross-regional infrastructure projects became the highlight of the cooperation. The Chinese enterprises broke the single cooperation model of only participating in the engineering construction in the past and synthesized many kinds of modes such as trade, investment and engineering. This intends to actively participate in the plan, design, construction, management and maintenance of projects such as the rail transit, port and power station of Africa. It not only makes significant contribution to the interconnectivity development of Africa, but also accelerates China鈥檚 technology, equipments, standards and service stepping into Africa.

The aviation cooperation made positive progress. In May 2014, Premier Li Keqiang proposed to implement the 鈥淐hina-Africa regional aviation cooperation plan鈥when visiting the Headquarter of the African Union. In 2015, various follow-up implementation work was promoted sturdily with positive progress. China signed the Memorandum of Understanding of Aviation Cooperation with six countries including Angola, Ethiopia, Zimbabwe, Cape Verde, Equatorial Guinea and Congo, and the Economic Community of West African States. The Ministry of Commerce jointly held the China-Africa regional aviation cooperation forum and the market promoting and policy information session with the Civil Aviation Administration. The Ministry of Commerce also set up the regional aviation cooperation information platform for Africa joined by the government, enterprises and financial institutes. Hainan Airlines Group united the China-Africa Development Fund to continue to expand the operational air route of the Ghananian joint-ventured airline company. The passenger load factor exceeded 70% and the local market share reached 40%. China Southern Airlines and Air China respectively opened the direct air route from Guangzhou to Nairobi, Beijing to Johannesburg and Addis Ababa.

In 2016, the Ministry of Commerce, guided by the 鈥済enuineness, honesty, intimacy and sincerity鈥 the concept of the cooperation with Africa, and the 鈥3th Five-Year-Plan鈥 will closely integrate the construction of the 鈥淏elt and Road鈥and the strategic layout of the international capacity cooperation. The Ministry of Commerce will overcome the difficulties, innovate, do a good job in the implementation work of the 鈥渢en cooperation plans鈥and strive to create an upgraded version of the China-Africa trade and economic cooperation.

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