China, Africa enjoy bright prospect of mutual investment

China and African countries enjoy a bright prospect of increasing mutual investment, a senior official from China's Ministry of Foreign Affairs said in Beijing Thursday.

Assistant Foreign Minister Lu Guozeng said in a news briefing that Chinese companies are at an initial stage to invest in Africa. They have set up some 750 enterprises in Africa so far, which involve a total investment of 1 billion U.S. dollars.

However, he said that in response to African countries' demand for foreign direct investment, the Chinese government has adopted a positive attitude to encourage Chinese companies to invest in Africa.

In an African policy paper released Thursday, the Chinese government pledged to support and facilitate corporate investment in Africa with preferential loans and buyer's credit. China will continue to sign and implement the agreement on investment protection and eliminate double taxation with more African countries.

"The two sides should work together to create a favorable environment for investment and cooperation and protect the legitimate rights and interests of investors from both sides," the policy paper said.

Lu said the Chinese government is pushing for the establishment of a China-Africa Joint Chamber of Commerce and Industry so as to facilitate the cooperation of companies from both China and Africa.

China and Africa enjoy a great complementarity in economy, Lu said, noting that the rich deposit of resources in Africa matches China's need of raw materials for sustained economic growth. On the other hand, African countries want to accumulate capital by developing these resources and to advance local economy.

China is willing to conduct mutually beneficial and win-win cooperation with African countries in resource development, Lu said.

China imports oil from African countries every year, Lu said. The oil import from Africa accounts for less than one-third of total amount that China brings in from international market every year.

African countries want to turn the oil deposit into money that is desperately needed for their development. They welcome Chinese companies to participate in various parts of the oil sector, ranging from upper exploration to downstream industry of oil refining, Lu said.

However, he said energy cooperation between China and African countries is only at an early stage. In Angola, Chinese companies have sealed a package deal to help develop its rich oil deposit. Chinese companies bring in the capital, technology and equipment that are needed for reconstruction of the country after years of civil war. In return, Angola pays the Chinese companies with resources.

Lu emphasized that both China and African countries win benefits from energy cooperation.

In addition, Chinese companies have conducted mining and forestation cooperation in southern and central parts of Africa, Lu said.

Trade volume between China and African countries is estimated to be 40 billion U.S. dollars in 2005, Lu said. Chinese customs figures show that China imported nearly 17 billion U.S. dollars worth of goods from African countries in the first 10 months of 2005, while the export stood at about 15 billion U.S. dollars. The difference of import and export meant a net cash flow into Africa.

Source: Xinhua