China Reform Monitor: No. 1197

[Editor’s Introduction: On December 4 and 5 Johannesburg, South Africa hosted the Summit of Heads of State and Government of FOCAC. The gathering, themed "Africa-China Progressing Together: Win-Win Cooperation for Common Development," was co-chaired by Chinese President Xi Jinping and South African President Jacob Zuma. During the FOCAC summit both sides adopted a declaration and a 2016-18 action plan, and China released its second Africa White Paper. On the sidelines, Xi met with more than 40 African leaders, and said in his concluding remarks that the China-Africa relationship would be raised to a comprehensive strategic partnership. FOCAC was established in 2000 and the last summit was in Beijing in 2006.]

December 1:

The China-Africa Media Summit themed "A New Era of Win-Win Media Cooperation between China and Africa" was held in Cape Town, South Africa before the FOCAC Summit. Representatives from 120 media organizations in China and 47 African countries attended, the official China Daily reports. In his keynote speech, Jiang Jianguo, Minister of State Council Information Office of China, stressed the media’s role in promoting friendship between the Chinese and African peoples and called for more and deeper cooperation. Each year China will train 1,000 African media professionals, invite 500 African youth and 200 scholars to visit China. "I am hoping that as media activists you will strengthen the relationship between Africa and your Chinese counterparts," said Jeff Radebe, South Africa’s Minister in the Presidency.

December 3:

For the first time since 1996, a Chinese president has visited Zimbabwe, the Diplomat reports. Xi was met at the airport by China’s "all-weather friend," President Robert Mugabe. China is Zimbabwe’s second-largest trading partner, trailing only South Africa with $1.2 billion in exports to China in 2014. Over two-thirds of Zimbabwe’s $837 million in exports to China were in tobacco, cotton, and chromium ores. Zimbabwe’s diamond exports, which had been an important export to China, fell from over $650 million in 2012 to just $350 million in 2014. China has invested in energy, mining, and agricultural projects in Zimbabwe, provided loans and overseen the construction of the National Sports Stadium, National Defense College, and the Longcheng Plaza shopping and entertainment center in Harare. China’s ambassador to Zimbabwe, Huang Ping, said: "nearly all vital infrastructure projects in Zimbabwe are supported by Chinese financial institutions and built by Chinese enterprises."

December 4:

President Xi Jinping and Angolan President José Eduardo dos Santos met on the sidelines of the FOCAC summit. Xi said bilateral relations are "at their highest level ever" and that Beijing intends to support Angola’s industrial, financial and infrastructure construction sectors, Macau Hub reports. Dos Santos, who made a state visit to China earlier this year, called for more investment in Angola’s oil sector, the financial sector, and food processing. He also asked China to broaden its involvement beyond raw materials. Samuel Andrade da Cunha, director of Asia and Oceania in Angola’s Foreign Affairs Ministry, told the New York Times: "We would like technology and everything to be transferred from China to Angola. We would like to make products in Angola by building factories or developing agriculture in Angola, which we can then export to other countries."

December 5:

State-controlled Chinese banks have lent money at rock-bottom interest rates in deeply indebted Nigeria based on the assumption that Beijing will repay them if Abuja cannot, reports the the New York Times. In 2013, Sinosure, a little-known Chinese government agency, guaranteed the loans on $427 billion worth of Chinese exports and overseas construction projects around the world. In Nigeria alone, China’s state-owned firms have started $24.6 billion worth of projects since 2005. The new government in Abuja is conducting anticorruption investigations into large Chinese construction contracts signed by the previous leadership. Since the fall in global oil prices in late 2014, government revenue has dropped by more than half and Nigerians are struggling to fund many projects, exposing China to potentially heavy losses. Most publicly, the new $874 million passenger train line linking Abuja to Kaduna has been delayed. In Kano, angry protesters blame widespread joblessness on China, which is manufacturing African fabric designs more cheaply than Nigeria.

[Editor’s Note: Nigerian factory owners can find laborers to work for $80 a month, compared to $550 a month in coastal China’s garment factories, which still can’t find enough workers. Rampant corruption has rendered Nigeria’s high tariffs on imported fabric largely irrelevant, and electricity from Nigeria’s national grid is unreliable so operations rely on diesel generators that cost them six times what garment-makers in China pay to operate.]

December 6:

At the FOCAC Summit President Xi Jinping announced 10 major plans to boost cooperation with Africa in the next three years, the official China Radio International reports. China will give $60 billion – $5 billion in aid and interest-free loans, $35 billion of preferential loans and export credits, $5 billion of capital for the China-Africa Development Fund, $5 billion in loans for the development of African SMEs, and $10 billion for the China-Africa production capacity cooperation fund. China will train 200,000 African technicians, offer 2,000 education opportunities with degrees or diplomas and provide 30,000 government scholarships. Beijing will also establish regional vocational education centers and colleges in Africa. On poverty reduction, Xi said China will launch 200 "Happy Life" projects focusing on women and children, cancel the debts of the least-developed African countries that mature this year, and provide $156 million in emergency food aid. China will carry out agricultural development projects in 100 African villages to raise rural living standards, send 30 teams of agricultural experts, and establish cooperation between Chinese and African agricultural research institutes. Xi pledged that China will provide $60 million to the African Union to support building an African Standby Force and said "China will continue to participate in UN peacekeeping missions in Africa and support African countries' capacity building in defense, counter-terrorism, riot prevention, customs and immigration control."