BEIJING, CHINA: The complementary nature of the relationship between African and China will be put to the test as developing countries try to develop a mutually beneficial association leveraging China’s growing manufacturing ability whilst enabling China’s access to natural resources enabling its impressive ‘economic march.’

“The share of high technological products is increasing, accounting for almost half of China’s export to Africa now, such as home appliances, mobile phones, autos, aircrafts and even satellites. More African products are also seen in the Chinese market and can be found by Chinese consumers, such as marble from Egypt, coffee from Cote d’Ivoire and Uganda, auto parts from South Africa, electronic products from Tunisia, tobacco from Zimbabwe, peanut oil from Senegal, cotton from Mali and cassava from Nigeria,” said Dr He Wenping, Director of African Studies Institute of West Asian and African Studies, Chinese Academy of Social Sciences.

She however noted that “resource products are still taking the lead in the trade at the moment. Africa is now the second largest crude oil resources to China.”China has signed mutual investment protection agreements with 28 African countries and endorsed dual taxes levy treaties with eight African countries to help bolster trade amongst the two trading partners say officials in China.

Since 2001 investment has grown from US$50million to nearly US$1 billion annually in recent years, making Africa the third largest investment destination for China. By 2008 investments in Africa reached US$26 billion, with 1600 Chinese enterprises based in Africa with investments focused on agriculture, manufacturing, communication and mainly infrastructure areas such as irrigation, road, bridge, railway construction and hydropower station. Sudan, Algeria, Nigeria, South Africa and Zambia are the main investment destinations.

A significant part of these are labour contracted projects largely developed since 1979, accounting for US$39.44 billion by the end of 2008, to times that of 2000 and accounted for 31% of labour contracted projects in the world.

Africa is becoming the largest market for China in this regard. According to officials in China, so far, Chinese companies have contracted in building more than 65000km roads, 34000 railways and 8 hydropower stations.Some African delegates to a leadership gathering here in Beijing believe there is a need to ensure the relationship remains equitable and more sustainable.“The Chinese tend to bring finished products and labour to Africa. We expect them to employ more local labour and transfer skills but not enough of this is happening,” said Qondo Khumalo, Chairperson for West Rand Amalgamated South African Farmers Association (ASAFA).

He said, “We would like to see more local African enterprises running joint venture partnership with Chinese as managers and not just as employees. There is also a need to have greater focus on building relationships with community based organisations and not just politicians whose careers are short lived and self serving.”

African countries need to develop infrastructure for economic take off and improving investment climate because underdeveloped infrastructure is a major bottleneck hindering Africa’s economic development given a funding gap of US$20 billion a year. Chinese enterprises on the other hand need to ‘go out’ to adapt themselves to the international market.The policy initiated in 1991 only really got off the ground in 2005 when 120 state owned enterprises from strategic sectors in China including power generation, mining, construction, transport, auto, electronics and machinery were selected to spearhead the country’s overseas interests.Omaima Mahmoud, Executive Director of Egypt-China Economic and Trade Council, said, “China and African countries have established an effective mechanism for the collective dialogue and multilateral cooperation and put in the place an important framework and platform for a type of Africa –china partnership featuring long-term stability , equality and mutual benefit.

She said, “China–Africa economic growth will gain increasing momentum especially after successfully passing the world financial crisis and trade reached US$126.9 billion, compared to trade volume of US$10 billions in 2000 when the Sino-Africa Cooperative Forum held, the annual increasing was over 30%.”

According to Mahmoud by August 2010, over 2000 Chinese enterprises were established in African continent, accumulative investment reached US$32.3 billion, accounting for 10% of total Chinese outward investment.

She observed that African countries mainly import machinery, textile, garments, shoes, iron and steel, wheat, tea, bag, pharmaceutical and plastics from China.Whilst China imports crude oil, raw wood, iron ore, diamond, cotton, copper and natural gas.