China’s Belt-Road Initiative Advancing Growth in Africa and Germany. Will the US join?

June 20, 2019

Everyday, nations around the world are experiencing economic growth by participating in China’s Belt and Road Initiative-BRI. For a truly global transformation, the United States must join this new paradigm of development. The most productive way to enhance relations with China, is for President Trump, at next week’s G-20 meeting, to discuss with President Xi Jinping, the US joining the BRI. This would create an unprecedented level of economic growth throughout the world. It would also be a brilliant flank against those voices in the US, and internationally, who are demonizing China, and trying two divide our two great nations. 

{Independent}: Belt and Road Contributing to Prosperity in Africa

A feature today in the South African {Independent Online Business Report} publication reviews the benefits of the Belt and Road Initiative for Africa, saying that Liberia, Morocco, and Tunisia have benefited from African development projects, as has Ethiopia from the Addis Ababa Light Rail, which cut travel time to and from the city. Through the BRI, China has also built a light-rail system in Abuja, Nigeria, the first to be built in Western Africa. Chinese construction companies have further assisted Angola in rebuilding its Benguela Railway, which had been destroyed in the civil war. The country can now transport goods from Angola’s western coastline to the border of the Democratic Republic of Congo.

Chinese-funded projects have also led to the construction of the Isimba and Karuma hydroelectric power stations, two new sources of electricity to Uganda, which will ultimately aid development. In Rwanda, road construction projects have brought young citizens into construction through their employment. This ultimately improved their welfare and provided labor skills. In the spirit of BRI’s trade ambitions, Egypt now looks to make the idea of the Cape-to-Cairo road a reality. Since taking the reins as 2019-2020 chairperson of the African Union, Abdel Fattah el-Sisi of Egypt plans to construct a superhighway through multiple African nations, eventually ending in Cape Town, to open
countries to trading in the Cape’s ports and in Cairo, Egypt’s gateway to the European Union.

German Mittelstand Supports New Silk Road

China’s proposed Belt and Road Initiative (BRI) has been creating opportunities for German enterprises, said Hans von Helldorff, chairman of the board of the Federal Association of German Silk Road Initiative (BVDSI), in an interview with Xinhua on June 17.

“The future markets and the new markets, for example, are in Asia, Africa, as well as Eastern and Southern Europe. They are not so well-connected. China has been providing the connections, thus it will generate great opportunities,” said von Helldorff, stating that new markets are needed by Germany’s Mittelstand firms.

Von Helldorff said that, thanks to the inter-connectivity, businesses have already been on the rise in some German cities, such as Hamburg and Duisburg. Many small and medium-sized companies in Germany got contracts with seaborne and logistics enterprises from China and other countries for local registration, legal, accounting, and tax services, von Helldorff stated.

“The infrastructure projects along the Belt and Road countries also need a lot of know-how. Harbor-related, road-related, train-related, etc. We have to open our eyes and participate in them,” von Helldorff said, declaring that the strengths of German businesses can contribute as an “innovation and investment engine.”

Speaking about prevailing doubts and worries about the BRI, allegations that the initiative might be politically motivated and harm local industries, von Helldorff said that some of them are simply clichés and that some are unfounded.

“The BVDSI sees China as a fast-growing economy that follows a plan. We need to sit and make eye-to-eye contacts and negotiations. Only cooperation in the sense of fair competition is for the benefit of humanity,” von Helldorff said. The BVDSI, founded in March 2019, is a business association serving as a platform for the interests of small- and medium-sized German companies. The BVDSI plans to organize a
forum later this year in Germany on the BRI for partners to establish project-related contacts.

 

In Africa, the Belt and Road Is Generally Spurring Socio-EconomicDevelopment

Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor project, also known as Lamu corridor is a transport and infrastructure project in Kenya that, when complete, will be the country’s second transport corridor

May 12, 2019

The Belt and Road strategy of international cooperation already up and running and phenomenally redrawing the global development map. With outlaying economic corridors and tremendous added value it is also putting Africa in the front-line of emerging global economic hubs, wrote Charles Onunaiju, Director Center for China Studies, Utako, Abuja, in his article, “Africa and China’s Belt and Road Strategy,” that appeared in {The Sun} of Nigeria on May 8.

Elaborating the contribution of the Belt and Road Initiative in Africa, Onunaiju wrote: “Since the action plan of the Belt and Road strategy was rolled out, key infrastructure projects have sprung up in Africa taking shape from its concessional funding support and inspirations of facility connectivity. In respect of overland construction, Chinese companies through concessional financial support have built the Addis Ababa-Djibouti Railway in Ethiopia, which is the first electrified railway in Africa, the Mombasa-Nairobi Railway in Kenya, the Abuja-Kaduna Railway in Nigeria, Benguela railway in Angola, and many others, including the Lagos-Ibadan-Kano-Abuja [railroad] under construction.

“With regards to the maritime component of Belt and Road Initiative, Africa features eminently in the key infrastructure projects. So far, Chinese companies have constructed the port of Bagamoyo in Tanzania, the No. 19 berth of the port of Mombasa and three berths of port Lamu, all in Kenya, the New port of Pointe-Noire in the Republic of Congo or Congo Brazzaville, the Lekki Deep Seaport in Nigeria, the Kribi Deep seaport in Cameroon, and the port of Tamatave in Madagascar.

“Under the framework of the Belt and Road strategy of international cooperation, the port of Cherchell in Algeria has been built and is in operation, while the Port of Luanda in Angola is under construction. The distinct feature of each of these ports is that they either have access to major road connections or sit near the sites of industrial parks, thereby having significant impacts on economic development of the coastal areas of Africa.”

Read the entire article below.

Africa and China’s Belt and Road strategy

China, Belt & Road: Eliminate Poverty, Not “Debt-Trap”

April 21, 2019

President Xi Jinping Hands-on Drive to Eliminate Poverty

As part of his government’s plan to entirely eliminate poverty from China by the end of 2020, President Xi Jinping carried out “an inspection tour to southwest China’s Chongqing Municipality” earlier this week, Xinhua reported, in which he pledged to address the issue like “a hammer driving a nail.” Xi first flew to Chongqing, China’s fourth largest city, and then spent another three hours, first by train and then by road, to reach Huaxi Village, where 302 people living in 85 households are registered as living below the poverty line.

Xinhua added: “Huaxi Village is a typical case of China’s impoverished regions. The basic needs for food and clothing have been met, but more efforts are needed for compulsory education, basic medical care and safe housing.”

It is to be noted that China’s criteria for poverty reduction are not strictly monetary, but include key physical-economic parameters such as education, health, and housing. As of 2018 there were still 16.6 million rural residents living in poverty in China. The government plans to lift about 10 million of those out of poverty during 2019. Xinhua then quoted Xi during his tour:

“The battle against poverty has entered a decisive and critical stage. We must press ahead with our full strength and strongest resolve and never stop until we secure a complete victory. After visiting the village, I feel reassured. We may have about 6 million impoverished people and 60 impoverished counties left at the beginning of 2020. If we make sure this year’s work is well-implemented and push ahead next year, we will eliminate poverty. We are confident about accomplishing the mission.

“Less than two years are left before fulfilling the objective of poverty alleviation. This year is particularly crucial,” Xi said at a symposium held Tuesday afternoon in Chongqing. “The most important thing at this stage is to prevent laxity and backsliding.” Xinhua’s account emphasized the top-down involvement of government officials in achieving this national goal. “Throughout the years, more than three million officials from governments above the county level, state-owned enterprises and public institutions have stayed in impoverished villages to offer assistance.

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FOCAC Summit 2018 (courtesy africa.cgtn.com)
I am posting the following article even though it is from last year, because the author accurately disproves the “debt-trap” propaganda being used by western institutions against China-Africa cooperation.

“2018 FOCAC: Africa in the New Reality of Reduced Chinese Lending”

August 31, 2018

W. Gyude Moore is a visiting fellow at the Center for Global Development. He previously served as Liberia’s Minister of Public Works with oversight over the construction and maintenance of public infrastructure from December 2014 to January 2018.

Debt Trap or Much-Needed Investment?

The debt trap diplomacy case, however, has never been convincingly argued and its application in Africa is, at best, tenuous. The reality of Africa’s debt to China is not particularly remarkable when taken against the sources of continent’s external debt stock (see figure below). A number of African countries’ (Djibouti, Kenya, and Angola) debt obligations to China are alarming—as they would be regardless of creditor. China’s $115 billion credit to Africa between 2000 and 2016 is still less than 2 percent of the total $6.9 trillion of low and middle income countries’ debt stock. Recent studies have shown that China is not a driver of debt distress in Africa—yet. The language of debt trap diplomacy resonates more in Western countries, especially the United States, and is rooted in anxiety about China’s rise as a global power rather than in the reality of Africa.

A column chart of external government debt for Sub-Saharan Africa by official, private, and Chinese creditors

Continue reading entire article

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China’s Belt And Road Forum to Gather 37 World Leaders, and Representatives from Five Continents

There will be no less than 37 heads of state and government attending China’s Second Belt and Road forum in Beijing next week, Chinese Foreign Minister Wang Yi said on Friday. In addition there will be 360 attendees at ministerial level, 100 leaders of international organizations and 5,000 participants. 4,000 reporters will also be attending the Forum, whose theme is “Belt and Road Cooperation, Shaping a Brighter Shared Future.”

“The second Belt and Road Forum will be held in Beijing on April 25-27. It will become China’s largest international event this year. Thirty-seven leaders of state and government will participate in the forum,” Wang told a press conference.  This will include the leaders of Austria, Egypt, Hungary, Italy, Russia, the United Arab Emirates and others. “Senior representatives” of France, Germany, Britain, Spain, Japan, the Republic of Korea and the European Union will also participate; other diplomatic representatives of the United States and North Korea will also be there. International Monetary Fund Managing Director, Christine Lagarde, and Antonio Guterres, the UN secretary- general, are also expected to participate, according to Wang.

This is the highest level event for cooperation on the Belt and Road Initiative, Minister Wang said. He said this year’s event will be characterized by a clear direction, a solid foundation, a warm response from participants, a program of practical cooperation and clearly defined results. A Leaders’ Round-Table Summit will issue a Joint Communique to show the political consensus of the leaders in building the Belt and Road.

The long-term effects of the Initiative will be to strengthen multilateralism, to enrich the principles of cooperation, to build a network of partnership and to build a strong support system for continued development. Wang Yi also underlined the connection between the BRI and China’s new phase of “opening up.” The new phase of  China’s “reform and opening up” will “bring more opportunities for promoting the ‘Belt and Road Initiative’ and the common development of all countries,” he said. “I believe that the forum will inject stronger impetus into the world economy, open even broader horizon for the development of the countries, and contribute to the building of a community with a shared future for humanity,” Wang continued.

Putin To Light Up Africa; African Leaders Gather at BRICS Summit

Russia will light up Africa – Putin

Russia will light up Africa - Putin
The African continent is in huge need of energy investments, and Russia could become one of its key partners, according to President Vladimir Putin speaking at BRICS summit in Johannesburg.

“I would especially like to note that Russia is planning to step up its assistance in development of national energy in African states,” said the Russian president during the BRICS-Africa Outreach panel on Friday.

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Commercial port of Novorossiysk, Russia © Vladimir Astapkovich

The leaders of governments of BRICS member states (Brazil, Russia, India, China, and South Africa) were holding a panel dedicated to economics cooperation between the bloc and African countries. The rationale behind the BRICS Plus concept is to create a platform for greater interaction and partnerships amongst countries to win more power for emerging economies globally.

According to Putin, Russia is in talks with Angola, Mozambique and Gabon on implementing promising oil and gas projects. “In the field of nuclear energy, where Russia is the technological leader, we offer African partners to build an industry from scratch,” the Russian president said. These projects are crucial for Africa since about 600 million people on the continent live without electricity.

Energy is not the only sphere where Russia and Africa could cooperate, according to Putin. “Russian business shows interest in working with African partners in a wide range of areas, including agriculture, healthcare, the development of mass communications, geology and subsoil use,” Putin said.

As examples, Putin mentioned Angola, where Russia’s Alrosa is interested in mining diamonds, a joint venture between Russia and Burundi on the production of lighting products for exports to East Africa, and agriculture projects in Senegal.

Modi Emphasizes India’s Commitment to Africa’s Development at the BRICS

July 27, 2018

Addressing a BRICS Outreach Dialogue Session today in presence of a large number African heads of state, Indian Premier Narendra Modi said: “The coming together of so many African leaders during this program is a wonderful thing. India’s ties with Africa are time-tested. The Government of India has deepened engagement with Africa. Economic and development cooperation between India and Africa have touched new heights,” India’s WION TV news reported from Johannesburg.

Among the African heads of state were: Paul Kagame (Rwanda), Yoweri Museveni (Uganda), Edgar Lungu (Zambia), Hage Geingob (Namibia), João Lourenço (Angola), Emmerson Mnangagwa (Zimbabwe), Ali Bongo Ondimba (Gabon), Mokgweetsi Masisi (Botswana) and Peter Mutharika (Malawi). The African leaders were invited by the host nation, South Africa, to discuss ways of pursuing inclusive growth on the continent with the BRICS heads of state, reported China CGTN television network.

South Africa’s BRICS website points out that since it last hosted the summit in 2013, all BRICS hosts have included an out reach format: “In 2013, South Africa took the initiative to activate the provision for a BRICS Dialogue with partners from the Global South, as per the Sanya Declaration that stated: ‘We are open to increasing engagement and cooperation with non-BRICS countries, in particular emerging and developing countries, and relevant international and regional organisations.'”

In his address, Modi, highlighting the ongoing cooperation between India and the African nations and welcoming the effort for regional economic integration by the African countries, he said “in the last four years, we have had more than 100 visits and meetings at the levels of heads of state and various government levels and these have taken our economic relations and development cooperation to a new high. India has offered 180 lines of credit worth $11 billion in more than 40 countries in Africa.”

In addition, he said that “every year 8,000 African students get scholarships to study in India” and pointed out that his country now has an e-network in 48 African countries for telemedicine.

 

 

Chinese Economic Engagement in Africa: New Silk Road on the Continent

“The closest look yet at Chinese economic engagement in Africa”

June 2017
The closest look yet at Chinese economic engagement in Africa

Field interviews with more than 1,000 Chinese companies provide new insights into Africa–China business relationships.

In two decades, China has become Africa’s most important economic partner. Across trade, investment, infrastructure financing, and aid, no other country has such depth and breadth of engagement in Africa. Chinese “dragons”—firms of all sizes and sectors—are bringing capital investment, management know-how, and entrepreneurial energy to every corner of the continent. In doing so they are helping to accelerate the progress of Africa’s economies.

Yet to date it has been challenging to understand the true extent of the Africa–China economic relationship due to a paucity of data. Our new report, Dance of the lions and dragons: How are Africa and China engaging, and how will the partnership evolve?, provides a comprehensive, fact-based picture of the Africa–China economic relationship based on a new large-scale data set. This includes on-site interviews with more than 100 senior African business and government leaders, as well as the owners or managers of more than 1,000 Chinese firms spread across eight African countries1that together make up approximately two-thirds of sub-Saharan Africa’s GDP.

Africa’s largest economic partner

In the past two decades, China has catapulted from being a relatively small investor in the continent to becoming Africa’s largest economic partner. And since the turn of the millennium, Africa–China trade has been growing at approximately 20 percent per year. Foreign direct investment has grown even faster over the past decade, with a breakneck annual growth rate of 40 percent.2Yet even this number understates the true picture: we found that China’s financial flows to Africa are around 15 percent larger than official figures when nontraditional flows are included. China is also a large and fast-growing source of aid and the largest source of construction financing; these contributions have supported many of Africa’s most ambitious infrastructure developments in recent years.

We evaluated Africa’s economic partnerships with the rest of the world across five dimensions: trade, investment stock, investment growth, infrastructure financing, and aid. China is among the top four partners for Africa across all these dimensions (Exhibit 1). No other country matches this depth and breadth of engagement.

Africa’s economic partners, including China, India, France, the United States, and Germany, based on goods trade, foreign direct investment, aid, and infrastructure financing

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China Remains Committed to Africa’s Development

Jan. 14, 2018–Chinese Foreign Minister Wang Yi visited Rwanda and Angola over the past two days, the first of four African nations he will visit on his first trip abroad in 2018. With Rwanda assuming chairmanship of the African Union for 2018 at the end of January, Wang discussed with Rwandan Foreign Minister  Mushikiwabo and Pres. Paul Kagame, preparations for this year’s summit of the Forum on China-Africa Cooperation (FOCAC). The aim of the summit will be to “dovetail China’s Belt and Road Initiative with African countries’ development strategies, thus boosting industrialization and modernization, and raising the comprehensive strategic partnership between China and Africa to a new level,” Xinhua reported as Wang’s message.

FOCAC, joining the 52 African nations, China and the African Union, has held a summit every three years, alternating between Beijing and an African capital, since its founding in 2000. A three-year action plan between China and the African countries is adopted at each summit. Beijing hosts the FOCAC summit in 2018.    At the conclusion of his visit to Angola today, Wang told a joint press conference with Angolan Foreign Minister Manuel  Augusto, that China will continue to support Angola in its efforts to diversify and modernize its  economy through “accelerated industrialization … on behalf of peace and unity on the African continent,”  Angolan media reported.  Wang also stressed that China is not concerned about Angola’s debt, and Domingos Augusto reported that they had discussed mechanisms to make the debt sustainable without interrupting current and future projects which require a financial cushion.

Angola’s foreign debt is over $40 billion now, much of it owed to China. With the price of its major export, oil, still low, Western bankers talk of Angola’s “debt crisis.”

Xinhua reported that Wang discussed the debt in response to a reporter raising the Western canard that “China’s financing has increased the debt burden of African countries,” and carries political conditions attached. Wang was blunt: “Such a claim, which is made with ulterior motives, is an outright false accusation…. China’s financing is in response to Africa’s demands for self-development. A country has a huge need for capital in its primary stage of economic take-off and industrialization and Africa is no exception,” he said. He added that “China also passed through this process; these are temporary problems,” as reported by Angolan media.

Furthermore, China does not attach political conditions. “Like African countries, China also had memories of a bitter past when, with its economic lifeline controlled by foreigners, it was unfairly treated and even exploited and oppressed. Therefore, when providing aid to and engaging in cooperation with Africa, China will not repeat what Western countries did and will never impose its own views on others.” China follows the principle of mutual benefit and win-win results, Wang stated.

China will continue to do its part in helping Africa develop itself, Wang concluded, citing two Chinese sayings: “only the feet know if the shoes fit,” and “people have a sense of natural justice.” The African people are in the best position to decide who is Africa’s true friend and most reliable partner.

In its Third Year, AIIB Will Expand Lending to African and South American Nations

As the Asian Infrastructure Investment Bank (AIIB) enters its third year of operations, its President Jin Liqun explained in an interview with the {South China Morning Post} that in the coming year, it intends to expand lending and operations to South American and African nations, as well as further into the Middle East as soon as that is possible.

Jin noted that with “quite a number” of South American nations joining the Bank, it will be a good idea to finance some middle-income projects in South America to “bring South America and Asia together,” and reduce transaction and shipping costs.

But, he stated, “I would also pay attention to supporting African member countries. Asia is developing quickly, but it cannot sustain itself well without collaborating closely with African countries.” Jin emphasized that the  geographical scope of the Bank’s activities makes clear its role “in pushing broader-based social and economic development in the member countries in which we invest.”

Responding to the claims from some quarters that the Bank is merely an instrument of China, Jin said quite the contrary is true. China “is committed to building the Bank into a multilateral development institution with 21st Century governance.” The AIIB is separate from the Belt and Road Initiative (BRI), he said, but that it is inescapable that some projects in which the AIIB is involved would be connected to the BRI, simply because of the scale of this global development project, which covers 60 countries across multiple land and maritime corridors.

Jin Liqun was emphatic that China strictly adheres to the Bank’s principle of multilateralism and internationalism. “There has never been any interference by the Chinese government in the decision-making process.”