China and Africa

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China, DR Congo elevate bilateral relationship

New outcome highlights solid China-Africa friendship despite US, West hyping of ‘debt trap’ narrative

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and Yin Yeping Published: May 26, 2023 06:10 PM Updated: May 26, 2023 11:38 PM

Photo: Xinhua

Photo: Xinhua

The traditional China-Africa friendship has yielded a new outcome after China and the Democratic Republic of the Congo (DRC) announced Friday the elevation of the bilateral relationship as the DRC president is paying a state visit to China from Wednesday to Monday.

Analysts said that with China and Africa entering a new era of building a closer China-Africa community with a shared future, their relations are unbreakable despite the US' and some Western countries' hyping of "debt trap" narrative.

Moreover, as recent weeks have witnessed more active interactions between China and African countries, with many African leaders and senior officials visiting China, the two sides are strengthening efforts to seek and practice true multilateralism, and this stable and benign cooperation is also a cornerstone for global stability and governance, analysts said.

On Friday, Chinese President Xi Jinping met with visiting DRC President Felix-Antoine Tshisekedi Tshilombo in Beijing, during which the two sides announced the upgrading of bilateral relations from a strategic partnership of win-win cooperation to a comprehensive strategic cooperative partnership.

Bilateral cooperation in various fields has yielded fruitful results in recent years, and China has been the DRC's largest trading partner and source of foreign investment for many years in a row. The two sides have forged a close community of shared interests and shared future, Xi said.

Xi also said China is ready to strengthen coordination and cooperation with the DRC in multilateral affairs, jointly practice true multilateralism, and uphold international fairness and justice.

He called on the two sides to uphold the basic norms governing international relations, oppose all forms of hegemonism and power politics, oppose interference in other countries' internal affairs, and safeguard the common interests of developing countries.

President Tshisekedi thanked China for its important assistance and valuable support for the economic and social development of the DRC over the past half century and said the country is willing to deepen cooperation with China in trade, energy, infrastructure and healthcare and other fields.

Recent days have witnessed more frequent interactions between China and African countries, with many African leaders, including Deputy Prime Minister and Minister of Foreign Affairs of Ethiopia Demeke Mekonnen Hassen, coming to China for visits. Also, the Chinese Foreign Ministry announced on Friday that at the invitation of State Councilor and Foreign Minister Qin Gang, Minister of Foreign Affairs and International Trade of Zimbabwe Frederick Shava will pay an official visit to China from May 27 to June 2.

Docking with strategic visions

Xi said China's successful experience in its path to modernization shows that developing countries have the right and the ability to explore modernization paths suited to their national conditions, adding that China is ready to synergize its development strategies with the DRC, support each other and promote cooperation and development.

China will, as always, help the DRC in its economic and social development, support its industrialization strategy, strengthen cooperation in energy, mining, agriculture, infrastructure, and manufacturing, and tap the potential of cooperation in the digital economy, education, and health, Xi said, adding that China is ready to send agricultural technology experts to the DRC.

China and the DRC also released a joint statement on Friday, announcing plans to promote cooperation in various fields, ranging from mineral to agriculture.

The upgrading of bilateral relations is a new outcome of the China-African friendship, and the joint statement fully demonstrates that China's cooperation with African countries is fully based on their own needs for development, Song Wei, a professor at the School of International Relations and Diplomacy, Beijing Foreign Studies University, told the Global Times on Friday.

China-DRC relations will be raised to a higher level and cooperation expanded to all areas of common interest, including education, scientific research, health, infrastructure, mining, agriculture, digital, the environment, sustainable development, hydrocarbons, energy, defense and security, according to the joint statement.

One of the most eye-catching fields of cooperation is on the digital economy, as the continent will miss an opportunity for future development in the post-epidemic era if it is not embedded in the digital economy, said Song.

Cooperation on minerals is another example of China helping the DRC diversify its economy and assisting it to build infrastructure and basic industries. Also, revitalizing the joint economic and trade cooperation commission mechanism as mentioned in the joint statement will encourage more Chinese companies to invest in the DRC, optimize its business environment and activate its indigenous development power, said the expert.

China's cooperation with the DRC highlights China's insistence on docking its own initiatives, for example the Belt and Road Initiative, with African countries' own development visions. China's sincerity in financially and politically supporting African countries based on their own interests and needs has never changed over the past six decades and will not change in the future, which is in stark contrast to the US and some Western countries' attaching political conditions to assistance, analysts said.

Martin Mpana, Ambassador of Cameroon to China and Dean of the Group of African Ambassadors to China, said in a speech at
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held in Beijing on Thursday that African ambassadors to China are very appreciative of the partnership that has developed between China and various African Countries as well as regional bodies such as the African Union Commission on a wide range of issues, ranging from infrastructure development to public health, advocating peace and stability, as well as various financial assistance and support through bilateral cooperation.

Mpana particularly noted the mutual benefit for both China and African nations participating in the BRI as it enters its 10th anniversary this year.

Qin Gang also said at the Thursday event that "the closer China-Africa relations are, the more guaranteed world peace is; the more successful China-Africa cooperation is, the more hopefully the world will develop," noting that China and Africa have entered a new era of building a closer China-Africa community with a shared future.

The close cooperation between China and Africa will also be a cornerstone for global stability and governance as they are working together to break the West's hegemony and dominant position in world order and making the voices and concerns from developing countries more heard and considered, said Song.

Sowing discord doomed to fail

However, China's contributions to the African continent, with infrastructure construction projects seen everywhere, as well as its friendship with African countries have worried the West and the US, which have beefed up efforts to rope in African countries and sow discord between them and China. Hyping "debt trap" or "neo-colonization" narratives are one of their tactics, said analysts.

While China-African relations are seeing accumulated results that benefit the sustainable development of African countries, they have also become an easy target for Western politicians and media to sully.

Qin said that to maintain their hegemony, certain countries have not hesitated to provoke division and confrontation, and have fabricated lies and false narratives such as the so-called "debt trap" and "neo-colonialism" to maliciously slander and obstruct China-Africa cooperation.

João Salvador dos Santos Neto, Ambassador of Angola to China, told the Global Times on Thursday that "we should not look at what some foreign media say, but look at the result - projects under the BRI have brought great changes to the development of Africa. This can be seen from the close relationship between many African countries and China."

The "debt trap" or other narratives that attempt to sow discord between China and African countries are doomed to be seen as fallacies that are easily refuted by fruitful China-Africa bilateral achievements. Instead of getting involved in the geopolitical games of the US, African countries prefer to focus on their own development, said analysts, noting that African leaders are also aware of the US' hegemony, making it less possible for them to be fooled by the US.
 

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Chinese drugmakers march into Africa​


Foothold on the continent could give them sway in setting global standards

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Building a presence in Africa will help China's independently developed pharmaceutical products to enter the global market.
BAO ZHIMING and HAN WEI, Caixin June 17, 2023 16:35 JST


Chinese pharmaceutical companies are gearing up a foray into Africa with multibillion-yuan investments in local drugmaking facilities, lured by the unmet health care needs of the world's fastest-growing and most underserved continent.

Wuhan Humanwell Hi-tech Industry Co. Ltd. is the latest Chinese drugmaker to unveil plans to build a factory in Africa. The Shanghai-traded company plans to open a plant to produce mainly psychiatric medications in Morocco, in North Africa, and a commercial company in Chad, a person from Humanwell's Africa operations told Caixin.

Humanwell has already operated two production facilities in Africa, including a 350 million yuan ($48.9 million) plant that opened in Mali in 2013. The facility, which primarily produces essential medicines, has an annual capacity of 30 million bottles of syrup and 40 million bottles of large-volume injections. In 2017, Humanwell invested 20 million yuan to build a plant in Ethiopia in East Africa to produce oral solids, liquid formulations and small-volume injections.

In 2022, Humanwell's sales in overseas markets including Africa rose 13.6% to 2.6 billion yuan, accounting for 11% of total revenues.
Shenzhen-based Cheerland Biotechnology, a leading biologics contract development and manufacturing organization, also disclosed a plan to build a production base in North Africa with an annual biomanufacturing capacity of 120,000 liters. The facility is set to start operating in 2024, Cheerland said.

Shanghai Fosun Pharmaceutical Co. Ltd., which runs the largest overseas business among Chinese pharmaceutical companies, earlier this month secured two loans totaling 50 million euros ($54 million) from the World Bank's International Finance Corp. to fund a project in Cote d'Ivoire. The facility, set to complete the initial phase next year, will have an annual capacity to produce 5 billion tablets of anti-malaria and anti-bacterial drugs, making it the largest drug-producing facility in West Africa.

Africa, a continent with 1.4 billion people, has long relied on imported drugs due to sparse domestic production capacity. According to the African Union Development Agency, about 90% of pharmaceuticals and medical consumables used on the African continent are imported.

According to the World Trade Organization, the import value of pharmaceutical products in Africa increased from $17 billion in 2019, before the pandemic, to $21.8 billion in 2021, representing an expansion of 28% in just two years.

Africa has been experiencing rapid population growth, with its disease burden accounting for one-fourth of the global total. However, pharmaceutical consumption in Africa constitutes only 2% of the world total, making it a region that has long been overlooked by major international pharmaceutical companies, said Markus Genuend, a director of Cheerland.

Medical demand in Africa is rising quickly, but instead of donations and aid, Africa most needs long-term investment by pharmaceutical companies to provide products that are tailored to its needs, Genuend said.

Africa has the potential to become an emerging pharmaceutical growth market, and Chinese drug companies have the opportunity to capitalize by partnering with local governments to build up local supply chains and offer a diverse range of products, he said.

Building a presence in Africa will help China's independently developed pharmaceutical products to enter the global market and get involved in the establishment of international medical treatment standards, a Fosun Pharma manager said.

A staffer at Humanwell said the company's business in Africa has focused on essential and affordable medicines in consideration of local people's limited purchasing power. The new facility in Morocco will expand its product portfolio to cover some higher-end products due to its proximity to the European market.

"In the future, the company will consider investing in active pharmaceutical ingredient factories and research and development centers in North Africa," the person said.

Running a business in Africa faces challenges such as different production standards applied across the region and political instability, the Humanwell staffer said.

"Our factory in Ethiopia remained idle for nearly a year during the conflict," the staffer said.
 

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Across China: Tea-drinking China embraces African coffee​

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In addition to China's expanding market, the country's continuous efforts to simplify import procedures for African agricultural products have paved the way for African coffee to enter Chinese cafes and homes.
China is the second-largest destination for African agricultural exports. In recent years, more categories of "Made in Africa" farm products have appeared on store shelves across China, including coffee from Ethiopia, cashew nuts from Tanzania, cocoa from Cote d'Ivoire and avocados from Kenya.
At Cash Coffee, more than half of all commonly used coffee beans come from Africa. "African beans boast a uniquely rich fruit flavor, so we've blended them into most of our Italian coffee beans," Yao said.
Own Master, or Coffee Z, is one such brand that has benefited from the simplified import process and the greater appreciation of African coffee among young consumers.

Using mainly African coffee beans, the cafe chain has so far opened nearly 50 branches in China and recently raised 100 million yuan in series A financing.

Jing Jianhua, the founder of Hunan Xiaokazhu Coffee, the firm that runs the coffee chain, said that the company's plan is to open 200 cafes this year, with the majority of those cafes to be located in smaller cities where young people have started to frequent cafes.

"Chinese culture and coffee culture are both inclusive. And the coffee trend in China is to integrate coffee with tea, fermented glutinous rice and local Chinese cultures," Jing said.
 

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Chinese cars, Chinese phones, Chinese apps, Chinese internet, Chinese funding:

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The dream of establishing smartphone “super apps” that can operate across Africa’s markets is galvanising Chinese investment into Nigeria. The activities give sense of the importance Chinese companies in several sectors attach to country’s potential.
Nigeria, with about 220mn people, is the continent’s most populous country and its biggest economy.
“[We are building] a very, very super app,” says Chika Nwosu, managing director of PalmPay, one of the Chinese-backed mobile payments start-ups. “Nigeria is the hub for business in Africa.” Also open for business in Ghana, PalmPay has seen its active users grow fivefold to 25mn over the past year and plans to expand to Kenya, Uganda and Tanzania, Nwosu says.
Super apps aim to be one-stop shops for a range of services, and PalmPay’s offering through its smartphone app is increasingly comprehensive. Users in Nigeria can pay utility bills, top up mobile phone accounts, pay about 500,000 merchants for a variety of goods and services, make bank transfers, arrange loans, receive money and perform a host of other transactions.
Nigerians are able to conduct about 80 per cent of their financial lives through the PalmPay app on their phones, according to Nwosu. By early next year, he says, new features will increase this to “100 per cent”.

The boldness of such a model, combined with the successful examples of Asian super apps, has drawn strong backing from international investors and fomented an intense competition for market share that is helping to drive a digital revolution.

PalmPay is backed by Transsion, a Chinese mobile phone company that dominates Africa’s smartphone market, plus Chinese internet company NetEase, Taiwanese chipmaker MediaTek, and a clutch of Chinese funds.

Its main rival, OPay, was valued at $2bn when it raised $400mn in 2021 from Chinese investors and SoftBank Vision Fund 2. OPay chief Yahui Zhou, a top web game developer, said “financial inclusion” was his goal when he announced a strategic partnership last year with Mastercard in several countries in Africa and the Middle East.
In Nigeria, where the World Bank says 64 per cent of adults remain unbanked, most people still pay by cash. But with Chinese smartphones available in Lagos shops for as little as $50, people are increasingly making cashless transactions.

Almost all of Transsion’s smartphones — which bear the bestselling Tecno, Infinix and Itel brands (all Chinese) — are sold with the PalmPay app pre-installed, giving the app immediate traction.
PalmPay and OPay’s decision to focus on Nigeria gives a sense of the importance that Chinese companies attach to the country’s potential. Nigeria became one of the top five Chinese investment destinations in Africa in 2020, after Kenya, South Africa, the Democratic Republic of Congo and Ethiopia, according to Merics, a Berlin-based think-tank focused on China.
The cumulative value of Chinese foreign direct investment into Nigeria by 2021 was more than $20bn, according to Cui Jianchun, China’s ambassador to Nigeria. He cites the Abuja-Kaduna and Lagos-Ibadan railways, new airport terminals, the Lekki deep water port and Zungeru hydropower station as key infrastructure projects financed by Chinese state banks.
The finance they offer helps Chinese companies win crucial contracts. For instance, Huawei, the Chinese telecommunications giant, is dominating the installation of 5G telecoms base stations after MTN, the South African mobile operator, chose to roll out 5G services in the country using Huawei equipment.
“The Chinese are pretty relentless,” says a senior Nigerian banker, who asked not to be identified. “They have delivered a lot of important infrastructure projects for us.”
This resourcefulness was on display at the Lagos Motor Fair held at the Federal Palace hotel in Lagos in June, where scores of exhibitors promoted auto parts to Nigerian customers. Almost all stalls were taken by Chinese companies and, at most counters, salespeople who had flown in from China told roughly the same story of starting small and growing businesses in Nigeria, patiently, from the grassroots.

“We don’t have more than a few clients in Nigeria,” said Chen Xiaoling of Zhejiang Gold Intelligent Suspension Corp, which already sells car parts in Egypt, Morocco, Algeria and South Africa. “The middle class here is not yet large but we have to prepare for one day when the market starts to mature.”
 

ansy1968

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Chinese cars, Chinese phones, Chinese apps, Chinese internet, Chinese funding:

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The dream of establishing smartphone “super apps” that can operate across Africa’s markets is galvanising Chinese investment into Nigeria. The activities give sense of the importance Chinese companies in several sectors attach to country’s potential.
The Chinese version of harvesting....lol Working hard to achieved the desired result first rather than projecting. ;)

“We don’t have more than a few clients in Nigeria,” said Chen Xiaoling of Zhejiang Gold Intelligent Suspension Corp, which already sells car parts in Egypt, Morocco, Algeria and South Africa. “The middle class here is not yet large but we have to prepare for one day when the market starts to mature.”
 

luminary

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Top Destinations for Africa’s Exports​

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Countries with top share of Africa’s total export value from 2010 to 2020:
CountryRegion201020152020
ChinaAsia11%12%15%
SpainEurope6%6%6%
IndiaAsia5%7%6%
UAEAsia1%3%6%
U.S.North America15%5%5%
FranceEurope6%6%5%
GermanyEurope4%4%5%


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luminary

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MSM keeps claiming that China is ready to join the debt relief effort. However, every indication from China is that it doesn't agree with World Bank, Paris Club or IMF's way of restructured debt.

From the look of it, even though China is only represented 22% of the loan but 75% of Zambia's debt that needed to restructure is owed to China. That means many Western institutional and private debts are off limit for restructuring. No wonder China isn't interested in the deal.
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More than 70 low-income nations face a collective $326 billion debt burden, with more than half of them already in or near debt distress, including Zambia, Ethiopia and Ghana. In many cases, China is the largest creditor. For instance, 75% of Zambia’s debt that has to be restructured is owed to China, according to the IMF.

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Of Zambia’s external debt, 46% is owed to private lenders, 22% to China, 8% to other governments and 18% to multilateral institutions. China is among the government lenders to agree a longer debt repayment schedule that private lenders, including banks, have so far resisted, Debt Justice said.

Was the restructuring of
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? Wasn't the point of withholding debt restructuring to starve the World Bank and Western loan sharks into agreeing to fairer terms?
Several sources (see
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,
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and
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) have reported that of the $6.3billion agreed to be restructured in the deal, about two-thirds (some $4.1billion) is money owed to the state-owned Export and Import Bank of China (EXIM China). The $4.1billion number is also what you'd get if you summed up all the money owed to EXIM China as contained in the Ministry of Finance's Public Debt Summary Statistics Report from last December (link
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). Further, the features of the deal (maturity extensions, low interest rates, brief moratoria on principal repayments, limited haircuts, etc...) have the classic features of China's preferred approach to debt renegotiation/restructuring (see
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,
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and
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for some of the academic evidence).
 
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